According to the study, pensions, Bolsa Família, and the Benefit of Continuous Provision (BPC) have a significant impact on the economy of these cities and can represent almost half of the budgets of the poorest families.
Related news:
"As the value received by these families is used almost entirely for the purchase of essential items, the money immediately circulates in the local economy, ensuring jobs and maintaining municipal revenue," highlights the co-director of Made-USP, economist Luiza Nassif.
- Government predicts credit for companies affected by the end of the 6x1, says Durigan.
- From unlimited work to the end of the 6x1: see the advance of the workday in Brazil.
- Child labor in the country decreases by 9.2% from 2024 to 2025, according to IBGE.
According to the survey, of the 5,569 municipalities in Brazil, approximately 4,000 are outside the metropolitan areas. According to the study, the weight of public transfers in these cities is twice that of large urban centers.
In Ceará, for example, social and pension benefits account for 22% of the household income in the capital and metropolitan region. In inland cities, this number is 40%.
Future impacts
The Made/USP study projected the economic effects of the evolution of social and pension benefits on inland cities over the next three years. The study took as its basis the years 2022 to 2025, in which there was real growth in BPC and pensions, and compared this scenario to the context of adjustments used between 2019 and 2022, without real gains in the minimum wage and total freeze.
The survey shows that, without the adjustments, the aggregate income of the interior of the country would suffer a severe contraction, falling between 6.8% and 10.8% below the level with the real appreciation of social and pension benefits.
"This would generate a chain reaction in economic activity that even affects families that do not depend on public assistance," Nassif assesses.
The study shows that the most critical scenarios would occur in the interior of Rio Grande do Norte, Amapá and Piauí, where total income would fall between 17% and 18%, without the current pace of increase in social benefits.
Amazonas, Sergipe and Pernambuco would have a loss in the range of 15%. Ceará, Maranhão, Alagoas and Bahia would have a drop between 10% and 13%, while Mato Grosso do Sul, Rio de Janeiro, Espírito Santo, São Paulo, Mato Grosso, Rio Grande do Sul and Santa Catarina could have a loss of up to 6.5%.
The effects on poverty
The survey highlights that, in addition to the effects on the income and economic activity of inland municipalities, the benefits play a decisive role in combating poverty.
"For those living on the edge, any adjustment below inflation pushes the family directly into poverty," says Nassif. According to her, for families with an income of up to 1.5 minimum wages per capita, the benefits can reach 50% of the income.
Simulations made by the survey indicate that the absence of real gains in benefits between 2022 and 2025 would have pushed approximately 2.7 million people into poverty in municipalities outside the metropolitan areas, 2.4 million into extreme poverty.
In absolute terms, the largest increases in poverty would occur in Bahia (up to 336,000 more people), São Paulo (up to 263,000), and Minas Gerais (up to 251,000), followed by Maranhão, Pará, and Ceará (with more than 200,000 each).
“Looking at the impact that falling incomes have, it becomes clear the damage that a freeze on benefit growth can do to local economies,” observes Nassif.
“Maintaining the real value of pensions, BPC, and income transfer programs is the minimum guarantee of dignity for families and the survival of local commerce in the heart of Brazil,” he adds.