Five Facts about the Decline of Business Dynamism in Brazil
Business Dynamism, Job Reallocation, Employment Growth, Job Market Concentration.
In the last two decades, business Dynamics, entrepreneurship, and fluidity in the labor market have substantially decreased in developed countries. This phenomenon has profound consequences for productivity growth, wage growth, and job creation. However, there is a lack of studies analyzing these factors for developing countries. Using combined data from companies and employees provided by RAIS (Annual Social Information Report), this article explores the evolution of business dynamism in Brazil. The results show that, similar to developed countries, Brazil has also seen a decline in business dynamism, with a reduction in the creation of new companies, participation and employment share of young companies, and job reallocation. On the other hand, unlike what is observed in developed countries, there is a decrease in labor market concentration.