The story of a businessman from the commercial sector of Santa Catarina has caused a lot of noise on social networks in recent days. He emphasized that he would close his business due to the difficulty of recruiting labor and associated this with the Bolsa Família program. Like almost everything lately, this episode was born full of prejudice and generated strong polarization. And when that happens, a more balanced debate is usually the first casualty.
In fact, there appears to be empirical evidence that the strong expansion of Bolsa Família, both in terms of coverage and average value of benefits, has generated some negative effect on the supply of workers and an increase in informality, as I argued in a previous article.
However, it is important to emphasize that this effect could decrease considerably more recently, particularly since mid-2025. Indeed, the number of beneficiaries has declined, either due to the improving job market (which is pushing many people out of the program) or due to increased government oversight.
Between 2014 and the end of 2021, the number of beneficiaries of the program varied between 14 and 14.5 million (families). With the move to Auxílio Brasil in late 2021, coverage was expanded to just over 18 million by mid-2022. On the eve of the 2022 presidential elections, the previous government promoted a new round of expansion, so the number of beneficiaries approached 22 million by the end of that year.
Between early 2023 and June 2025, this number decreased significantly, reaching almost 20.5 million. Throughout the second half of 2025, the decline was greater, with coverage reaching 18.7 million in December 2025. Thus, compared to the peak observed at the turn of 2022 to 2023, there was a reduction of more than 3 million families benefiting from the program.
Furthermore, even if the empirical estimates – carried out with data that do not yet take into account this significant drop in beneficiaries in the second half of 2025 – have highlighted a certain negative effect on the labor supply, this has not necessarily been bad, since some of these people, especially the youngest, have started to study more (as pointed out by my IBRE colleague, Daniel Duque, in a study published in August last year), which tends to generate favorable effects on the market later of work.
Furthermore, a public policy must be evaluated on the basis of the comparison between its benefits and its costs (i.e. the net balance). Although this recent expansion of Bolsa Família may have had counterproductive effects on labor supply, the benefits of the program still far exceed its costs, as several studies attest. In any case, the ideal would be to try to continually improve the program, seeking to strengthen the favorable effects and minimize the unfavorable effects (even if fiscal resources are not infinite).
Returning to the case of the businessman, other factors certainly affect the labor supply of companies in a much more negative way than Bolsa Família. If between 2016 and 2024 there was excessive unemployment, today this no longer happens, because we are close to the so-called “full employment”.
Finally, entrepreneurs like him increasingly face competition from the so-called “gig economy,” the world of app-based workers who are “freelancers.” According to Central Bank estimates, the number of people belonging to this segment increased from 770,000 in 2015 to 2.1 million in 2025.
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