Resilient Regions in Brazil: Unfolding the Effects of COVID-19 From a Socioeconomic Perspective

Abstract

At the beginning of 2020, the world was left in an unprecedented state of shock by the COVID-19 pandemic. Brazil quickly became the epicenter of new cases of contamination, where the propagation of the virus was unrestrained, despite boasting one of the strongest Universal health coverage systems in Latin America. This paper has at least three empirical contributions to the literature about economic resilience and the COVID-19 pandemic. Firstly it is a critical issue regarding the “economics versus life” trade-off, which is an essential question for developing countries, given that policymakers must decide between policies to reduce the number of COVID-19 infections without damaging the economy. Secondly, our findings suggest that the early adoption of isolation measures applied in 2020, such as the financial aid and the vaccination have been effective in controlling the effects of the pandemic, especially in vulnerable microregions. Furthermore, it was verified that the Emergency financial aid was a fundamental policy in minimizing the economic impacts of the pandemic and allowing people to practice social distancing, contributing positively to the Employment Resilience Index and negatively related to the growth rate of deaths due to COVID-19. The contribution of our study is to measure an inverted U-shaped curve to demonstrate that policymakers must achieve a minimum of families to decrease the COVID-19 deaths. These contributions are essential and straightforward findings to lead policymakers' decisions in developing countries facing financial constraints in the public budget and population reticence about physical distancing, self-quarantine and vaccination.

Introduction

At the beginning of 2020, the world was shocked by the COVID-19 pandemic, whose impacts persist to this very day. The huge underestimation of the number of COVID-19 cases and the subsequently high case-fatality rates in Brazil and other countries, especially developing countries, is noticeable (Andreoni 2021) and this was one of the most evident failures of the Brazilian government in the face of the pandemic. Brazil quickly became a country where the propagation of the virus was unrestrained, and the epicenter of new cases of contamination due to a lack of coordination of strategic actions (Abrucio et al. 2020).

The COVID-19 pandemic has socioeconomic, sanitary, human, and geopolitical consequences, which further aggravate the structural problems that particularly affect emerging and low-income countries (ECLAC 2021a; World Bank 2020). This crisis is considered a syndemic because its characteristics interact in a social, sanitary, food safety and environmental context, characterized by profound inequality (Ravallion 2020; CEE-FIOCRUZ 2021). In Latin America, for example, countries have faced great challenges in controlling the pandemic and managing recovery, given its structural problems and low capacity of resilience (Diniz et al. 2020).

Although Brazil has one of the strongest Universal health coverage (UHC) systems in Latin America, its capacity is highly uneven across the country (World Bank 2020). The virus has spread more in densely populated, often deprived, urban areas where health inequality is rife. Most affected areas include the North and Northeast regions where we observed the system’s inability to respond to an increased demand for services. The increased pressure on the already overstretched public health care system, hits the poorest and most vulnerable population more directly and disproportionately.

We must begin by dissecting the regional economic resilience perspective, which is the region’s ability to react to shocks, disruptions and rapid changes at different scales (national, global, etc.). We propose to analyze the regional COVID-19 implications in Brazil, the importance of public policies to mitigate this pandemic and, also, its effects. Periods of crisis and contractionary shocks affect economic cycles and provide inflection points in short and long-term development trajectories, intensifying pressures for changes in routines, conventions and policies, in order to mitigate deleterious effects and also preparing for future crises. Although the number of studies focusing on regional impacts of the pandemic or other contractionary shocks has increased, especially in developed countries (Bourdin et al. 2021; Bailey et al. 2020; McCann et al. 2021), this type of analytical and systematic approach involving distinct dimensions at the regional level has been less frequently used in LDC countries.

Starting with the empirical strategy using data at the microregional level and a System of Equations estimated (Seemingly Unrelated Regressions - SUR), we detected the importance of the Emergency Financial Assistance and the vaccination in the recovery of employment and for the death dynamics of COVID-19. Our sample covered 558 Brazilian microregions, using monthly data. In order to isolate the effect of both variables, controls for the health services structure and productive structure (through sectoral information and export data) will be used. We also insert dummy variables for the state level, aiming to capture the particularity of the public policy of each state, and the percentage of votes for the current president in the first round of the 2018 presidential elections, as a proxy for the political dimension (Rache et al. 2021).

This paper has at least three contributions to the empirical approach relating regional economic resilience and the COVID-19 pandemic. Following (Martin 2021), through this framework, regional socioeconomic transformations and abilities become more evident, and let us show how different places adapt to entirely new contexts. This theoretical approach allows us to understand better how the previous features of the regions can contribute to explain the differentiated impacts of this pandemic across Brazilian territory.

First our paper contributes empirically to the critical issue "economics versus life" trade-off. This is an essential question for developing countries since policymakers must decide between policies to reduce the number of COVID-19 infections without damaging the economy. In this sense, our study highlights the importance of early adoption of social isolation measures in reducing COVID-19 deaths (Crokidakis 2020; Schimit 2021) and increasing employment resilience. Secondly, we reveal the importance of social expenditures to promote financial aid to low-income families, contributing to previous literature on the importance of this policy in boosting the economy (Douglas et al. 2020; Susskind and Vines 2020). Moreover, our study reveals that financial aid is also a significant predictor of reducing COVID-19 mortality rate. Finally, our study consolidates previous literature on the importance of vaccination as a strategy to control deaths caused by COVID-19 infections (Arregocés-Castillo et al. 2022; Cook and Roberts 2021; Victora et al. 2021; Tenforde et al. 2022).

The contribution of our study was to measure an inverted U-shaped curve which presents the relationship between vaccination and the dependent variables in an attempt to demonstrate that policymakers must achieve a minimum of vaccinated families to decrease the number of COVID-19 deaths. We also elucidate the importance of the vaccination policy in boosting the economy, mainly in a developing country (Sandmann and Jit 2022). Significantly, these contributions are essential and straightforward findings to lead policymakers' decisions in developing countries, which face financial constraints in the public budget and population reticence towards social isolation and vaccination.

This paper will be structured as follows: Section 1 discusses relevant literature to understand the impact of COVID-19 in Brazilian microregions and the political action required. Section 2 presents the theoretical framework and main hypothesis. Section 3 describes the empirical strategy and in Sections 4 and 5 the results are presented and discussed. From the results, policy recommendations are suggested in Section 6. Finally, this paper will attempt to present its conclusions.

From the Economic Recession to the COVID-19 Pandemic: Offshoots of Various Crises in Brazil

Throughout the 1980s and 1990s, the Brazilian economy was hit by a succession of economic and political crises, such as high inflation, trade balance deficit, the external debt crisis, drop in growth and high unemployment. A new growth cycle seemed to emerge from the monetary stabilization achieved with the Plano Real and, a decade later, with the growth cycle induced by the boom in Asian countries. Nevertheless, Brazil was hit by two economic recessions: the subprime crisis (2007-2008) and the internal recession (2015-2016). Tupy et al. (2020) explain that the former affected demand for Brazilian main exports, whilst bringing instability to relative prices and a shortfall of liquidity. This recession was a ‘territorially generalised crisis’ caused by a very particular combination of political and economic factors that forced the Brazilian economy into a second recession.

The worsening of the fiscal condition, which prompted austerity policies that were coupled with a corruption scandal that not only halted the activities in important productive sectors (construction and oil) but also resulted in political turmoil that lowered expectations and increased uncertainty in markets (Tupy et al. 2020). For Diniz and Mendes (2021) the economic austerity also harmed the state’s ability to invest and weakened the confidence of private investors, as a consequence of the economic crisis and the changes in the political orientation of the federal government.

Brazil had not yet recovered from the succession of previous shocks, when in early 2020, the COVID-19 pandemic began to spread across the world, culminating in not only a health crisis but also an economic, (geo)political, social and food crisis, giving it its syndemic character (Ravallion 2020; CEE-FIOCRUZ 2021). The impacts of the current crisis will be vast as well as spatially uneven. As stated by Bailey et al. (2020), in comparison to the last global financial crisis, the impact of the COVID-19 pandemic is likely to be much more profound and pervasive, exacerbating the preexisting inequalities and populism. Similar findings have been reported for Brazil (Norden, Mesquita, and Wan 2021; Abrucio et al. 2020).

The COVID-19 pandemic can also be considered a ‘territorially generalized crisis’, directly impacted by the different regional and structural characteristics. As stated by Tupy et al. (2020), exploring the resistance dimension of regional resilience, it was verified that different crises had to have several implications of regional reaction and adaptation. According to these authors, understanding the spatial features of the contractionary shocks and its specificities on local productive structure, especially in the most affected areas (the highest concentration of non-resistant regions), is fundamental to mitigating the impacts and crisis.

For any country, a pandemic presents a challenge, especially because of the impact on the health system; which ends up being overwhelmed by the high demand of those infected and by the economic impact of measures such as lockdown. Therefore, the pandemic phase clearly highlighted the need for coordination between agents, especially in a globalized and capitalist world. The characteristics presented by Brazil during the peak period of the pandemic showed the need for public policy management units to offer minimally acceptable conditions to vulnerable segments of the population. The next section will present an overview of the Brazilian situation in the face of the COVID-19 pandemic and the policy action implemented.

Lethargy and Neglect: Action and Measures Against COVID-19 in Brazil

Regardless of the stages of economic development, the pandemic has affected the entire world. However, the responses to it vary across countries. Since the beginning of 2020, governments and central banks have implemented an accommodative monetary policy to mitigate the recessive impact of COVID-19 (OECD 2021). Fiscal expansions by increasing public deficits and national public debts have also been adopted (Araújo, Araújo, and Ferrari Filho 2021). COVID-19 has forced the implementation of programs to protect against further deterioration of income to households and credit conditions, allowing firms in risk of bankruptcy. Without them, rising insolvencies and bankruptcies would have an inevitable impact on national economies and global growth prospects (OECD, 2021).

In the case of Brazil, the political, institutional and economic scenarios before the pandemic were already particularly serious, which exacerbated the crisis, especially in the sanitary and fiscal sphere. COVID-19’s direct and indirect effect on the federal government’s results stems from its negative impact on economic activity and the drop in tax collections and other revenues related to the economic cycle (IPEA 2021).

A peculiarity in Brazil regarding the pandemic was the way in which the federal government conducted themselves. Studies such as Norden, Mesquita, and Wang (2021), Diniz et al. (2020) and Abrucio et al. (2020) detected the persistence of huge disagreements and discoordination between the Brazilian federal and state/municipal governments about how to react in the face of the COVID-19 pandemic. This meant that policy intervention decisions in Brazil were ultimately taken at a municipality level, implemented in a staggered way, and varied in several dimensions, such as speed, duration and intensity (Norden, Mesquita, and Wang 2021).

Local government implemented policy interventions such as the closure of public venues and non-essential services, while the federal virus-control policies have been prominently decoupled from those of local governments (Norden, Mesquita, and Wang 2021). On the other hand, within the initial scope of the Central Administration, several obstacles compromised the beginning of the containment of the pandemic in Brazil.

Abrucio et al. (2020) highlight as the “path of Bolsonarist Federalism” some features such as the creation of the COVID-19 Crisis Committee without subnational representation; SUS resources do not reach the states; the unconstitutionality decision on Provisional Measure 926/2020; Lawsuits in the Federal Supreme Court (STF) of states; “War Budget PEC” enacted (EC 106/2020); measures originating from the War Budget PEC; Federative Program to Combat Coronavirus (LC 173/2020); change in the methodology of information on COVID-19 provided by the Ministry of Health. These failures hampered the effective start of action in fighting the pandemic.

Analyzing the Federal Government budget data from March 2020 to 31 December 2020, it appears that the smallest resource allocations were directed to the items directly related to the COVID-19 pandemic control¹, and in these cases, the resources paid were at the limit or lower than the expected allocations. Table A (see the Appendix) summarizes the main measures taken by the Brazilian Federal Government from the beginning of the pandemic to the present day.

Furthermore, the Federal Government rejected the scientific recommendation for physical distancing, there was a delay in ordering COVID-19 testing, 3 Ministers of Health were replaced and there was a lack of a national contingency plan. As stated by Abrucio et al. (2020), the Brazilian federal government’s operating logic has been a presidentialism that repudiates institutional negotiation and checks and balances of the Brazilian State, among which is federalism. The combination of compartmentalized, autocratic, and confrontational federative logic became evident in the pandemic, especially against mayors, governors, the National Congress and the Supreme Court Federal (STF). Therefore, in order to understand the COVID-19 pandemic in Brazil, political aspects matter and have to be taken into consideration.

Theoretical Framework and Hypothesis

This study sets out to investigate the Brazilian challenges in the political, sectoral and regional spheres based on the decisions made throughout the pandemic crisis. The impacts of COVID-19 have accelerated regional socioeconomic transformations and revealed the abilities of regions to adapt to crisis (Martin 2021). In this sense, it is important to take into account the regional and sectoral aspects of the pandemic, in order to improve the implementation of policies that aim to mitigate the impact of crises of the same nature and to generate learning to avoid the occurrence of some mistakes in future pandemics (Haddad et al. 2021; Rodriguez-Pose and Burlina 2021).

The concept of regional resilience is the theoretical framework of this research. According to this literature, the structural, institutional and historical conditions previously determined of the regions condition the effects of shocks (Martin and Sunley 2015). Nonetheless, as stated by these authors, it does not imply a return to a previous equilibrium point or regional path but the ability of a system or a territory to resist, adapt, respond, recover and or renew from a shock. Studying the elements that contribute to this post-shock regional performance, are one of the justifications for using this theoretical framework. Furthemore, although already consolidated in Europe, it is scarcely used in discussions about economic geography in Brazil, covering a research gap. In this sense, the regional economic resilience literature helps us understand how the structural heterogeneity of the Brazilian microregions results in different restrictions to developing a more complex productive sector, to mitigating primary-commodity exports and services (often linked to tourism) shocks and to responding to a generalized crisis scenario (Tupy et al. 2020).

As aforementioned, studies involving regional economic resilience have been more widespread in Europe. Many of them focus their analysis on employment after some contractionary shock. Pontarollo and Serpieri (2020) investigated the 2008 financial and economic crisis in order to assess the regional economic resilience of European countries. From the renewal of growth trajectories in the labor market, the authors found different results for the regions, especially the resilient ones. The article highlights how oriented policies in areas such as education, especially higher education, softened the impacts resulting from the crises and expanded the production factors of the economies. Another study aimed to investigate the relationship between income inequality and resilience in Spain using the employment rate responses to the 2008 crisis (Geelhoedt, Royuela, and Castells-Quintana 2021). Based on variables that measured employment resilience, 995 Spanish municipalities responded to the great impact caused by the 2008 recession. The results showed that high levels of income inequality equate to low resilience in employment rates.

Part of the empirical studies on economic resilience uses data from economic production and/or labor market for regional analyses, justified mainly by the availability of access and quality of data, by the level of disaggregation required. In addition, Kitsos, Carrascal-Incera, and Ortega-Argilés (2019) highlight that labor market data, in particular, reflect broader socioeconomic conditions in other dimensions, as the lack of employment reflects important conjunctural (and structural) conditions. The implications on the economy are highly significant, namely the loss of the general wellbeing of citizens.

In a situation of a contractionary shock like the COVID-19 pandemic, concerns such as the economy, health and wellbeing are the focus of the political debate. One can observe that the social isolation resulting from the pandemic will cause many changes in the quality of life of the world population and in the consumption habits of society. The key issue for Brazil focuses on the strength of public policies to reduce social and economic disparities which affect the poorest segments of the population.

It is important to emphasize that the current crisis has revealed problems of a multidimensional nature, in terms of social, scientific, economic, health and environmental aspects (Ravallion 2020). Therefore, evaluating the resilience capacity of Brazilian microregions from a socioeconomic perspective will allow for the confrontation of structural problems (short and long term), in addition to improve the capacity of planning for recovery after the pandemic has been controlled. As stated by Diniz et al. (2020), Brazilian microregions will have different patterns of resilience and vulnerabilities to extreme shocks, such as the COVID-19 pandemic. Large scale crises amplifies these weaknesses, rendering them more critical in terms of economic activity, the determinants of resilience capacity, and the ability to overcome hardships by adapting and changing. Employment resilience and the COVID-19 death rate are associated with factors/aspects such as the policy and political dimensions, the health structure, the economic dimension and other state level policies.

The resilience literature highlights that policy makers play an important role in the preparation of regions to deal with recessive shocks and to support resilient regional economies (Di Caro and Fratesi, 2018; Tupy et al. 2020). This feature seems to be even more relevant in the face of COVID-19. As pointed out by Rodriguez-Pose and Burlina (2021), regional conditions associated with the role of the local and national governments and institutions add to their effect on the uneven spatial patterns of pandemics should be more explored in research. According to these authors, improving the effectiveness of national and local government actions should be a priority in response to the current pandemic and to prepare society for the future consequences of it.

Considering the policy dimension, the main hypothesis is:

H1

the two main Brazilian policy measures to deal with the Pandemics and its impacts - the Emergency Financial AID and the vaccination - have been positively impacting employment resilience and have led to a drop in the COVID-19 death rate.

Despite the delay, cash transfers were implemented to reduce the impact in the poorest regions. These areas are more vulnerable to the consequences of COVID-19 because they are more dependent on measures implemented by local governments to avoid a national breakdown (ECLAC, 2021b). In particular, the Basic Emergency Income (Emergency Aid per capita) was crucial in keeping up the income level during the pandemic and it was introduced after popular mobilization. This cash transfer to informal workers has had an important potential to reduce negative economic effects of the lockdown (Ferreira dos Santos, de Santana Ribeiro, and Barbosa de Cerqueira 2020). It was beset by problems such as eligible people having difficulty accessing the benefit, delayed payment and the social exclusion from lack of access to digital technologies especially among the poorest (Marins et al. 2021).

The Pandemics have highlighted a huge impact on the political environment in the public health dynamics and in the willingness of the population to practice social distancing (Moraes 2020). Particularly, populism has had a high potential to fuel the spread of COVID-19 (Gugushvili et al. 2020; Mckee et al. 2021). Mckee et al. (2021) explores potential mechanisms that link populism and the spread of the disease. In this sense, they identified that populist leaders: (i) tend to build a narrative that blames the action of others, usually outsiders and the victims for their misfortunes; (ii) have contempt for institutions, and therefore tend to not accept rules, boundaries and restrictions that come from them; (iii) tend to reject evidence and science, adopting tactics associated with denialism.

In this context, if on the one hand the current federal administration is responsible for the public policies against the pandemic, on the other hand, for the most part of this period, the behavior of the president and his cabinet ministers, as well as their voters, often denied the danger of the pandemic and its impacts. The importance of massive vaccination was also ignored by them. In this sense, the votes for Bolsonaro as the gap in the public policies to control the COVID-19 situation and the lack of national strategy that forced the subnational (state) - level policies to introduce the isolated alternatives to control the spread of coronavirus (Norden, Mesquita, and Wang 2021; Abrucio et al. 2020; Barberi and Gómez 2020). The political dimension has also been characterized by the fast opening of the trade and economy proposed as the solution to keep up employment rates. As mentioned by the authors cited, the weak federal coordination to deal with the pandemic and the urgency of state-level policies can be understood as Bolsonaro ignoring scientific evidence and advice regarding physical distancing and the imprecise and insufficient early testing for the viruscases.

In the case of Brazil, empirical evidence already indicates that the actions and discourse of President Bolsonaro has reduced the public engagement with isolation and social distancing measures (Norden, Mesquita, and Wang 2021; Abrucio et al. 2020; Ajzenman, Cavalcanti, and Da Mata 2021). Consequently, the analysis of other studies found that places with a higher share of votes for Bolsonaro has presented a significantly lower adoption of social distancing by the population (Leone 2021) and higher COVID-19 mortality rates (Cabral, Ito, and Pongeluppe 2021; Xavier et al. 2022). Consequently, another hypothesis of the paper is:

H2

the percentage of votes in the far-right in the second round of the last presidential election is positively related to a higher growth rate of COVID-19 deaths.

Due to the absence of federal public policy coordination and the need for the provision of emergency financial assistance, social isolation measures were taken individually by the local government without a central coordination. While some governors and mayors decided to implement rigid measures after the pandemic inception, others were more relaxed regarding their overall pandemic response framework. Moreover, it also shows that the regions that were less effective in reducing the death rate were late in implementing disease-containment strategies to restrict the spread of Coronavirus. Social isolation measures are fundamental in securing livelihoods and mitigating the short and long-term impacts of the COVID-19 pandemic. This leads us to another hypothesis:

H3

microregions with higher proportion of municipalities in the early adopters of isolation measures faced less impacts on the death growth rate but a lower employment resilience.

Other variables have been introduced in the model to control for both health structure and the social aspects, such as hospital bed capacity (per capita). Reports evidence the irregular distribution of beds, and the lack of doctors and intensive care units in public health, despite Brazil having one of the strongest health care systems in Latin America (SUS) (World Bank 2020). By way of illustration, the spread of the virus in the poorest microregions appears to have been exacerbated by the lower health care capacity, the asymmetries in the public health system and by macroeconomic aspects such as the delay in domestic demand recovering, unemployment rates and the low-income level (Norden, Mesquita, and Wang 2021; Rocha et al. 2021).

Regarding the macroeconomics variables, low GDP volatility is associated with the most resilient regions where the employment rate recovers faster than in the less resilient ones. The variation in exports has been affected by commodity price instability, reduction in output, and a collapse in oil prices all of which have affected the supply chain (ECLAC 2021b). In the Brazilian economy in particular, the variable Export is a crucial aspect that shows the employment structure. The major exporters of the commodities capacity hits approximately 50% of the share of soybean exports and nearly 30% of the world’s poultry exports and the effort to supply the international demand for agricultural commodities (Mallory 2021). The cost of the outbreak and the severity of COVID-19 has permeated facets of the economy, namely wages, demand, and factories. Furthermore, it highlights the importance of fiscal provision, financial and monetary policy measures to avoid economic and social costs (Diniz et al. 2020).

The Credit variation highlights the importance of financial support regarding the under-provision of credit to cover the costs of the economic shock (Norden, Mesquita, and Wang 2021; Martin and Sunley 2015). The variable (dummy regional) shows the absence of national public policies to control the virus and the death rates, as efforts to expand the state-level capacity and the absence of Brazil’s federal coordination and management of the pandemic, served to exacerbate the transmission of and mortality rate of COVID-19.

Empirical Strategy and Database

In a broader sense, the discussion about the impacts of the pandemic and policy measures in response to it has involved two dimensions in particular: health and economic dynamics. In Brazil, the so-called “economics versus life” trade-off was, and still is, at the center of political debate, mainly due to the discourse of the federal government led by the Bolsonaro administration. Taking this context into account, the modeling in this paper consisted of estimating a Two-Dimensional System of Simultaneous Equations to explain both the relative regional resilience of formal employment and the pandemic’s severity path during the period. The relative regional resilience was measured by a Resilience Index based on the Resistance and Recovery Index created by Martin and Monteiro (2016). The severity path of the pandemic was measured by the COVID-19 death rate (per capita).

Simultaneous-Equation Modeling has been used in several applications in applied regional sciences and economic geography and its starting point is the recognition of a mutual interdependence among certain variables (Mitze and Stephan 2015). In this paper, the Simultaneous Equations were estimated using a Seemingly Unrelated Regressions Model - SUR - (Zellner 1963) applied to a Panel Data Setting with random effect (Nguyen 2010). By using the SUR Modelling, we could take into account the fact that the economic performance of regions and the local severity of the COVID-19 were related during a particular period, but without identifying any causal relationship between them. The Seemingly Unrelated Regressions implicitly models the economics and health relation dynamics through the positive correlation between the error term of the 2 equations. By assuming error correlations between the two equations, the SUR Model provides efficient estimates (Cameron and Trivedi 2010).

Hence, we assume that these two dynamics should be analyzed together, during this specific time period, as a consequence of common and partially unobserved determinants - social distancing and isolation measures – rather than due to a theoretical causal nexus that can link the deaths to economic performance, and vice-versa.

$$\mathrm{R}\mathrm{e}{\mathrm{s}}_{\mathrm{i}\mathrm{t} }={\mathrm{\beta }}^{\mathrm{\prime }}{\mathrm{X}}_{\mathrm{i}\mathrm{t} }+{\mathrm{\epsilon }}_{\mathrm{i}\mathrm{t} }$$

$$\mathrm{\Delta }\mathrm{D}\mathrm{e}\mathrm{a}\mathrm{t}{\mathrm{h}}_{\mathrm{i}\mathrm{t} }={\mathrm{\gamma }}^{\mathrm{\prime }}{\mathrm{Z}}_{\mathrm{i}\mathrm{t}}+{\mathrm{\mu }}_{\mathrm{i}\mathrm{t}}$$

$$\mathrm{C}\mathrm{o}\mathrm{r}\mathrm{r}\left({\mathrm{\epsilon }}_{\mathrm{i}\mathrm{t} },{\mathrm{\mu }}_{\mathrm{i}\mathrm{t}}\right)\ne 0$$

Where $\mathrm{R}\mathrm{e}{\mathrm{s}}_{\mathrm{i}\mathrm{t} }$ is the relative regional resilience index for the Formal Employment in region i in period t; $\mathrm{\Delta }\mathrm{D}\mathrm{e}\mathrm{a}\mathrm{t}{\mathrm{h}}_{\mathrm{i}\mathrm{t} }$ is the growth rate of per capita deaths due to COVID-19 in region i during period t; ${\mathrm{X}}_{\mathrm{i}\mathrm{t} }$ and ${\mathrm{Z}}_{\mathrm{i}\mathrm{t}}$ are the respective explanatory variables; $\mathrm{\beta }$ and $\mathrm{\gamma }$ the parameters to be estimated; and ${\mathrm{\epsilon }}_{\mathrm{i}\mathrm{t} }\hspace{0.17em}and\hspace{0.17em}{\mathrm{\mu }}_{\mathrm{i}\mathrm{t}}$ are the random idiosyncratic error terms that are assumed to be correlated with each other.

The explanatory and control variables present in ${\mathrm{X}}_{\mathrm{i}\mathrm{t} }$ and ${\mathrm{Z}}_{\mathrm{i}\mathrm{t}}$ are not necessarily the same. Apart from some common determinants (Emergency Aid, Vaccination Rate, Regional and temporal fixed effects), the ${\mathrm{X}}_{\mathrm{i}\mathrm{t} }$ matrix includes variables that are assumed to impact employment but not deaths, and the ${\mathrm{Z}}_{\mathrm{i}\mathrm{t}}$ matrix the opposite. Finally, it is important to highlight that this analysis is preliminary, given that the phenomenon we are studying is still in progress and the pandemic is not fully controlled in global terms.

Database

Monthly data were collected between January 2020 and September 2021 for the 558 Brazilian microregions. The information used in the database is secondary and comes from sources such as: Brazilian Health Informatics Department (DATASUS), the General Registration of Employees and Unemployed (CAGED) from the Ministry of Labor and Employment (MTE). All monetary variables were deflated by the IPCA - Extended National Consumer Price Index - IBGE (Sept. 2021 = 100). The detailed description of each variable is presented in Table 1, below.

Table 1.

Variables and Data.

Dimension	Variable	Description	Source
Dependent variables
Economic	$Re{s}_{it }$	Relative regional resilience of formal employment, based on Martins and Monteiro (2016)	CAGED
Health	$\mathrm{\Delta }Deat{h}_{it }$	Monthly percentual growth of the number of deaths by COVID-19	DATASUS
Explanatory variables
Policy	log (Emergencial AID per capita)	Reflects the introduction of the basic emergency income programmes as financial support for the poorest affected by the COVID-19 outbreak	Ministério da cidadania
	Vaccinated per capita (%)	Representation of the cumulative percentage of the local population that got the second shot of the COVID-19 vaccine	DATASUS
	(Vaccinated per capita (%))2	This variable is incorporated to assess non linearities among vaccination and the dependent variables	DATASUS
	Social Isolation Measures	Represents the percentage of municipalities in the micro-region that adopted formal social isolation measures in 2020	MUNIC/IBGE
Political	Votes for far-right (%)	Variable that represents the percentage of votes for the current brazilian president elected in 2018. This variable is a proxy to represent the far right supporters in Brazil	TSE
Health	beds_int_sus_pc	Hospital bed capacity (per capita)	DATASUS
Economic	Export	Variation in regional exports (US$ FOB)	CAMEXSTAT
	Credit	Real2 variation in regional bank credit per capita	ESTBAN/BCB
	Tourism sector	Location quotient (LQ) to measure the regional concentration of the tourism sector in december 2019	RAIS/MTE
	Education sector	Location quotient (LQ) to measure the regional concentration of the education sector in december 2019	RAIS/MTE
Space and time controls	Regional dummies	Dummies for the brazilian macro-regions: Northeast, southeast, south and midle-weast. The north region is the baseline	IBGE
	Monthly dummies	Dummy variables for the months. Aims to control seasonal factors. January is the baseline	—

Source: Author’s own.

Employment data was gathered from the General Registration of Employees and Unemployed (CAGED) from the Ministry of Labor and Employment (MTE). However, this data just comprises formal occupations and does not consider aspects such as informal employment and self-employment that represents 40% of the Brazilian population in 2021 (IBGE 2021). The informal sectors and self-employed workers are affected by the income instability, especially compared to the formal sector. The formal employment rate variation points to the asymmetries in the Brazilian job market and the regional different responses to the COVID-19 outbreak. The maintenance of employment rate and formal job posts are associated with quarantines and labor agreement measures, the teleworking and protecting workers’ rights, namely layoff workers.

Results

This section discusses the temporal and regional aspects of employment resilience and deaths during the COVID-19 pandemic in Brazil. Figure 1 presents the Brazilian scenario of 558 Brazilian microregions in September 2021. Figure 1(a) presents the distribution of deaths per 100 thousand people caused by the virus, which is concentrated in rich and urban areas, especially in the Southeast and South regions. However, poor cities in the states of Amazonas and Acre were also affected by the pandemic, notably due to the lack of hospital infrastructure. Figure 1(b) reveals the dynamics of vaccination in Brazil, which was high in developed regions, such as the state São Paulo. It is important to note that poor areas in the North and Northeast are lagging behind relatively compared to developed regions in the South and Southeast of Brazil. It shows the importance of a coordinated federal policy for the country to overcome the pandemic.

Figure 1.

Regional aspects of the COVID pandemic and policy responses in Brazil.

Notes: (a). Deaths per 100 thousand people by September 2021; (b). Percentage of vaccinated population by September 2021; (c). emergency financial assistance per capita by September 2021; (d). Percentage of municipalities that adopted lockdown measures in 2020. Source: Author’s Own.

In contrast, Figure 1(c) reveals the concentration of the Emergency Financial Assistance per capita, which is available for poor families, especially in the North and Northeast regions. Figure 1(d) shows the adoption of lockdown measures in Brazil, which is spread across thousands of Brazilian municipalities. It is noteworthy that regional policymakers lacked adequate federal policy coordination, which has led to heterogeneous, and even divergent, local responses and measures. This can be seen by the uneven distribution of Isolation Measures (Figure 1(d)) and Vaccines (Figure 1(b)).

It is important to highlight an aspect regarding the vaccination. Firstly, the lack of federal coordination forced the federative states to take the lead in order to promote the mass vaccination process. In this sense, states such as São Paulo, considered the main research and development pole in Brazil, with better medical-hospital infrastructure and health support (such as the Butantã Institute – a world-renowned leader in vaccine research and production), managed to stand out in the deployment advance of the vaccination, which can be seen in Figure 1(b). In contrast, the poorest regions, mainly in the North, we see the vaccination rates are still occurring later. Additionally, there was no clear regional pattern on the Geography of Isolation Measures during 2020, which evidences this lack of coordination. Figure 1(d) shows a high heterogeneity in the adoption of lockdowns even within the same Macro-regions and states.

Table 1 presents the econometric estimates of the Panel SUR for Brazilian Microregions. We analyzed the determinants of employment resilience and the COVID-19 death rate. Employment resilience is important to analyze the drivers of economic recovery in a developing country. Additionally, the determinants of COVID-19 deaths are important to reveal the most effective policies to face the pandemic. Note that the adoption of social isolation also contributed to boosting Employment Resilience. In other words, regions that have adopted Social Isolation Measures in 2020 presented a higher Resilience Index. Even, financial aid impacts employment resilience by 0.152%, which shows the importance of financial support offered by the Federal Government during the pandemic. We can also note an inverted U-shaped relation between vaccination and employment resilience. This indicates that in the very first stage, vaccination is not enough to boost employment resilience. However, after a turning point, vaccination is an effective policy to generate more employment resilience in Brazilian microregions.

The estimation results indicate whether, on the one hand, isolation measures - so important in controlling deaths - have had evident impacts on the regional economies, on the other hand, the two main measures adopted financial aid and vaccination seem to be effective in controlling the implications of the pandemic in both dimensions: health and economy. The Emergency aid measure was implemented with two main objectives. Firstly, it maintained an income for the country’s most financially vulnerable at the height of the economic crisis, in such a way that it has reduced the decline in regional aggregate demand. On the other hand, it may have allowed the most vulnerable people, and informal workers, to stay at home and to ensure social distancing (Natalino and Pinheiro 2020). Indeed, our results suggest that these two goals were achieved. We can see that the Emergency aid is positively related to the Employment Resilience Index, while it is negatively related to the COVID-19 death rate. Although the effect of the aind on the proxy for the Severity Dynamic of the pandemics is negative and significant at 1%, we recognize that the size of this effect is very small Table 2.

Table 2.

Results of the Panel SUR for Brazilian Microregions: Jan. 2020 to Sept. 2021.

Variables	Employment resilience	COVID-19 Death Growth Rate
Log (emergencial AID per capita)	0.152***	−2.91e-05***
	(0.0224)	(6.37e-07)
Vaccinated per capita (%)	−19.69***	−0.00133***
	(1.118)	(3.18e-05)
(Vaccinated per capita (%))2	58.23***	0.000885***
	(2.237)	(6.36e-05)
Social isolation measures	0.377***	−1.70e-05***
	(0.0900)	(2.60e-06)
$\mathrm{\Delta }Export$	1.363***
	(0.0424)
$\mathrm{\Delta }Credit$	−8.87e-05***
	(1.97e-05)
Tourism sector	−12.16***
	(0.271)
Education sector	−1.704***
	(0.537)
Votes for bolsonaro (%)		2.64e-05***
		(8.67e-06)
beds_int_sus_pc		0.00774***
		(0.000788)
Regional dummies	YES	YES
Monthly dummies	YES	YES
Observations	7.578	7.578

Notes: Standard errors in parentheses ***p < 0.01, **p < 0.05, *p < 0.1. Standard Errors in parenthesis. Source: Own elaboration.

Whether the Financial aid worked as a palliative measure to minimize the economic impacts of the pandemic and allowed people to stay at home and to practice social distancing, vaccination is considered the potential solution for both the economic crisis and the pandemic itself. The non-linear effect of the vaccine on both dependent variables is measured by the variables ‘Vaccinated’ and ‘Vaccinated²’. In both cases, these effects are highly significant. Regarding the Employment Resilience Index, results show that in the very first steps of vaccination, especially having the second inoculation, employment can decrease, but after approximately 17% of the population were fully vaccinated, the economic impact becomes highly positive.

Therefore, our results suggest that after approximately ⅕ of the population is fully vaccinated, the increase in the vaccination rate starts to improve the economic environment. This can be explained in many ways: (i) The increase in the vaccinated population improves the overall economic expectation, increasing firm investment; (ii) Vaccination is also responsible for the return of many sectors that were directly affected by the pandemic, such as schools, tourism, arts and concerts, sports - football in particular, and other sectors that had adopted a working from home policy for their employees.

As expected, the increase in the percentage of the fully vaccinated citizens reduces the number of COVID-19 deaths, as can be seen by the coefficient of the variable Vaccinated. However, the coefficient of the variable Vaccinated² indicates that this effect is not linear. The model predicts a higher impact of the vaccine in reducing the COVID-19 deaths once 75% of the population fully vaccinated is reached. However, this cannot be viewed as a turning point. In addition, we have to point out that, within the period analyzed, almost no region has achieved this level yet.

The time-fixed variable “Social Isolation Measures” represents the percentages of municipalities in each region that declared that they had imposed official isolation measures at some point during 2020. This variable represents a measure of commitment of local authorities tasked with containing the pandemic. Surprisingly, the results of our studies suggest that regions where there was a higher percentage of municipalities which implemented lock-down performed better in terms of economic resilience of employment. Although we expect that the periods of isolation have damaged the economy, the result can be easily explained. Regions more committed to the control of the pandemic could avoid severe new waves of COVID-19, whilst regions that did not act properly or in a timely manner were more prone to multiple waves of infection and probable deaths. On the other hand, regions with a higher commitment to official isolation measures presented a fall in COVID-19 deaths per capita, which reinforces the importance of such measures.

Social distancing and isolation were also influenced by ideologies, mainly as a result of the position taken by Brazil’s president regarding COVID-19. The time-fixed variable that accounts for the percentage of votes for the Brazilian president in the 2018 election is significant and suggests that regions where Bolsonaro received a higher percentage of votes in the first round of the elections, performed worse in the control of the pandemic in terms of the COVID-19 death rate.

Regarding the strict economic variables that are supposed to influence only economic resilience, we noted that, as expected, the variation in regional export value is positively related to employment resilience. The decrease in exports was the very first implication of the pandemic in many Brazilian regional economies, even before the first COVID-19 death was recorded in the country. This is, in large part, due to the sudden reduction in global commerce as soon as the health crisis emerged in China and in Europe.

The economies that were more specialized in sectors such as tourism, education and commerce were less resilient during the pandemic. Indeed, these activities are more dependent on in-person interactions, and thus, more affected by the need for social distancing. The opposite can be seen in the sectors of Information and Communication Technologies and of Administrative Activities. The new context brought about by the pandemic has affected the way society uses technology resources, deepening some processes and completely changing the course of other ones.

Discussion

As presented by the studies and our previous results, the COVID-19 pandemic has imposed several challenges on developed and developing countries. Another point concerns that the structural conditions of regional economic resilience, once affected by adverse shocks, present different conditions for adaptation and recovery.

Our results show that particularly with developing regions, the “economics versus life” trade-off has highlighted doubts about social and economic policies management during the pandemic. For this reason, this study investigates the economic, social, political, and institutional determinants of the COVID-19 pandemic in both employment resilience and the COVID-19 death rate scenarios. We used this strategy to compare whether employment resilience and death rate determinants respond similarly to the “economics versus life” trade-off. In this sense, we achieve the purpose of this study by revealing that social isolation, financial aid, and vaccination rate are essential determinants for both scenarios.

In this way, the contribution of this study is threefold. Firstly, our study confirms that the social isolation policy in 2020 was vital in reducing the death rate caused by COVID-19, and it has a positive impact on employment resilience. In this light, our study corroborates with other studies that show that social isolation reduces the death rate (Crokidakis 2020; Schimit 2021). Schimit (2021) shows that social isolation mitigates the impact of the COVID-19 pandemic on the health system by reducing the need for intensive care units and mechanical ventilators, which in turn prevents the collapse of the healthcare system. Our study sheds light on the importance of social isolation on the death rate and employment resilience. In other words, we demonstrate that the early adoption of social isolation measures is a significant predictor of avoiding deaths and boosting economic recovery during the pandemic. This result is important for developing regions, which face the uncertain decision to save lives and maintain employment.

Secondly, we show that financial aid is essential in boosting employment resilience and reduce deaths caused by COVID-19. The mechanism of financial support to low-income families is recognized by several studies (Douglas et al. 2020; Susskind and Vines 2020), and it was used during the COVID-19 pandemic in several countries (Ashraf 2020; Ozili 2021; Ikeda et al. 2021, ECLAC 2021b). Our study advances by showing that this policy also effectively reduces the COVID-19 death rate. For instance, low-income families who receive public financial support can maintain social isolation by avoiding inadequate working conditions (i.e. informal work in the Commerce and Service sectors), providing adequate food, and purchasing essential health and hygiene products, for example, medicine, protective masks, soap, among others (Douglas et al. 2020). This finding is relevant for policymakers in developing countries with limited public budgets and the need to allocate financial resources towards effective policies in order to reduce deaths and increase employment.

Thirdly, our study confirms that the vaccination policy effectively prevents deaths and boosts employment resilience. The vaccines have prevented COVID-19 deaths worldwide (Cook and Roberts 2021; Victora et al. 2021; Tenforde et al. 2022; Arregocés-Castillo et al. 2022). However, developing regions have faced issues with the unequal distribution of vaccines due to the lack of technology to produce them (Callaway 2020; Tatar et al. 2021; Rydland et al. 2022). Albeit Brazil historically presents a relatively adequate vaccination system compared to other developing countries (Victora et al. 2021), despite the recent hesitancy of Brazilians due to political issues (Norden, Mesquita, and Wang 2021; Troiano and Nardi 2021; Gramacho and Turgeon 2021). To this extent, we corroborate with other studies by showing the importance of vaccines in preventing deaths (Cook and Roberts 2021; Victora et al. 2021; Tenforde et al. 2022; Arregocés-Castillo et al. 2022).

We advanced by showing an inverted U-shaped curve between the number of people vaccinated and COVID-19 deaths growth rate. It is important to highlight that our turning point (75% of the population fully vaccinated to prevent deaths) is higher than the turning point found by Cook and Roberts (2021) (50% of the adult population vaccinated) in the United Kingdom. The inverted U-shaped curve sheds light on the importance of public policies to encourage a minimum number of families to receive their vaccines to achieve the turning point that reduces deaths. This finding is more relevant for those countries that face hesitancy in some types of vaccines against COVID-19 (Troiano and Nardi 2021; Gramacho and Turgeon 2021). We also revealed that the vaccination policy against COVID-19 is an important determinant of economic growth/development, as previous studies have shown (Sandmann and Jit 2022). A balanced assessment of our findings would support our hypothesis that a higher number of vaccinated people increases employment recovery. This mechanism occurs because face-to-face businesses can safely restart economic activities.

The evidence from previous studies suggests that the highest degree of socioeconomic vulnerability from exposure to COVID-19 presents the most significant increase in death rates, especially in Brazil’s North and Northeast regions (Ferraz et al. 2021; Tavares and Betti 2021; Rocha et al. 2021, Diniz et al. 2020). All things considered, a lower socioeconomic vulnerability was crucial in containing the effects of the epidemic. Moreover, the Emergency Financial Aid is a fundamental aspect in minimizing the pandemic’s economic implications as well as allowing people to maintain social distance. It was verified that this public policy was positively related to the Employment Resilience Index and negatively related to the growth rate of deaths due to COVID-19.

Policy Recommendations

Policymakers require straightforward tools to boost employment growth and infection/death control during the COVID-19 pandemic. In the short term, this paper reinforces the importance of the coordination capacity of policy by governments in their various instances; the flexibility of economic policies in order to support health and social policies and the permanence of income and employment. Furthermore, this challenging scenario requires effective long-term policies to achieve economic development in low and middle-income countries. In terms of policy recommendations, we put forward the following proposals:

• (1) Development and maintenance of management tools capable of collecting and systematizing information from the population safely and effectively. This information is essential to pandemic control and future scientific studies to promote policy recommendations. In addition, technical training of employees with political competence is also necessary.

• (2) Government-led policies are required to achieve employment resilience and pandemic control. To this effect, supply-side policies, such as creating jobs and promoting the economic recovery; help the sectors most affected by the recession; providing the necessary investments to increase economic efficiency, stimulating technological advances in science and health; investing in transportation and other infrastructure that provide long-term economic benefits; stabilizing state and local government budgets in order to minimize and avoid reductions in essential services and counterproductive increases in local taxes are necessary to boost employment, especially in poor regions (i.e. North and Northeast of Brazil). Also, these policies are crucial to pandemic control due to the lack of basic infrastructure and basic needs for low-income families. Such policies must affect the economy in several ways, such as preserving and creating jobs and promoting economic recovery, helping the sectors most affected by the recession (i.e. Commerce and Services), and providing the necessary investments to increase economic efficiency. Also, these policies might stimulate technological advances in science and health, which is vital in decreasing the dependency on imported equipment and health resources; investing in transportation and other infrastructures to provide long-term economic benefits; stabilize state and local government budgets in order to minimize and avoid reductions in essential services and counterproductive increases in local taxes.

• (3) Policies adopted by subnational governments adequately controlled the pandemic and employment resilience. Logically, we argue for a more centered and coordinated national policy to define rigid or more flexible social isolation decisions during the pandemic waves. Moreover, it is necessary for the Federal Government to coordinate vaccine distribution, especially in remote and poor areas (i.e. Amazonia) and specific social groups (i.e. indigenous people), where local governments have limited public budgets and lack the human capital.

• (4) As found by our study, financial aid was crucial for low-income families facing the COVID-19 pandemic, therefore, it should be maintained as a short-term policy.

Finally, these policies must develop a socio-economic transition model including social aspects (health, education, income) and science and technology dimensions to provide adequate infrastructure to the health network and human development in a developing country.

Conclusion

Based on the consideration that the different structural features of the regions are important to plan economic development strategies, especially in the face of a contractionary shock such as a pandemic, this study would conclude some important remarks. Firstly, we were able to demonstrate the importance of the vaccination for the resumption of the economy and how Emergency Financial Aid was fundamental to soften the impacts related to the pandemic. Given the above information, we conclude that the economic policy that allows the creation of the budget of public spending and investment, and that changes the priority of economic policy by changing the direction of state subsidies, enabling and encouraging a less uneven and more sustainable, especially in times of crisis.

Weighing up the facts, this paper successfully contributes to this debate by analyzing the relations between the pandemic, public policies and regional resilience, considering the effects of COVID-19 and its socioeconomic implications from a Brazilian perspective. It should be emphasized that this research instrument is the most suitable for investigating distinct dimensions at the micro-regional level, especially for the comparability of different contexts (political, sectoral, and regional).

One of the most significant findings to emerge from this study is that the regions where a higher percentage of municipalities adopted lock-down had a better performance in the recovery of employment because the regions that were more committed to the isolation measures avoided new waves of COVID-19 and consequently had a lower number of COVID-19 deaths per capita. The time-fixed variable, votes for Bolsonaro, strongly suggests that regions where the president received a higher percentage of votes presented the worst results for controlling the pandemic and demonstrated slow economic recovery.

Weighing up the facts, the results extrapolated from this study suggest the need for counter-cyclical and long-term policies to mitigate the recessive impact of the COVID-19 pandemic considering that many institutional, economics, political and social aspects were already unsatisfactory in Brazil before the pandemic. There are several important changes which need to be made to promote Brazilian recovery, namely the inclusive and sustainable policies, combined with the conditional cash transfer programs, social protection to the poorest and unemployed, financial support for the underemployed and for informal workers, as well as the individual micro-entrepreneur. There is also a definite need to support the public Unified Health System (SUS) as it is a fundamental tool to improve the economic environment and the employment rate and to lower the death rate.

In general terms, this study highlights the importance of considering the deal with the new scenarios brought about by the pandemic that rescue old problems and its links to regional inequality. Secondly, long term challenges are more stringent on developing countries, as in Brazil, shows that problems caused by the COVID-19 pandemic and other disasters of the past are not strictly natural, but caused by human actions. Public policies, including misguided or poorly coordinated public policies, which amplified Brazilian social inequality and their effects.

The most important limitation lies in the fact that data from employment are just available for formal jobs, and the effects of outbreaks can be even more strong for informal and self-employed workers. Future studies should assess other social aspects such as gender and race sensitivities to the outbreak, as well as the economic complexity index associated with the regional output volatility related to the employment resilience index and the supply chain. Besides this, wider implications investigating the relationship between the economic complexity index and the output volatility in high and low-income regions would be relevant for future studies.

Appendix.

Table A.

Main Measures Implemented by Central Brazilian Government (2020-2021)^a.

Type of Policy	Main measures
Health policy	The ministry of health launched the national plan for operationalization of vaccination against Covid-19 (middle of December 2020)
	Number of doses produced or arrived to the country: 10,700,000; 2 million doses of AstraZeneca/Oxford delivered in January 2021; 8.7 million doses of coronavac/Sinovac delivered in January 2021
	Transfer to the national health fund - purchase of PPE and respirators - MPV 947
	Supplementation to social protection under the Unified Social Assistance System (SUAS) - MPV 953
	Covid-19 global vaccine access - covax facility - MPV 1004
	Financial assistance to santas casas and non-profit hospitals (supplementary SUS) - MPV 967; law 13,995
	Assistance to states and municipalities - health transfer - parliamentary amendments; law 14,032
Locomotion and displacement restrictions	From March to July 2020: Flight bans and border closures (to and from specific countries)
	March 2020 restriction measures and traveler monitoring from areas affected by COVID-19
	Mandatory quarantine for foreign travelers, confirmed or suspected cases
Monetary and fiscal policies	Monetary and financial measures to improve liquidity, increased capital and, support trade; opening and supporting of special credit lines, issuance of additional loans, extension of terms for repayment of credits (consumers and companies) or extension of mortgages
	Measures to preserve the productive capacity and create conditions for the reactivation of economic activity through liquidity mechanisms for companies, in particular for SMEs
	Referential interest rate (SELIC) has been lowered from February 2020 to March 2021 (2%). Since then, brazilian central bank (BACEN) has increased the official interest rate every 2 months to reach 9.25% (December 2021)
	Reduction of compulsory requirement
	Improvements in the short-term liquidity indicator (LCR)
	Resumption of purchase operations with commitment to sell (repo) securities/Brazilian sovereigns bonds denominated in dollar
	New time deposit with special guarantees - NDPGE
	Interventions in the exchange and interest markets (strengthening foreign exchange reserves, liquidity swaps and coordination between BACEN and the national treasury)
	Fiscal measures that include flexibility to redirect state budgets, proceed to tax relief tax, delay the deadlines for filing tax returns or tax exemptions for certain economic sectors
	“War budget PEC” Orçamento de Guerra (EC 106/2020), from May 2020 to 31th December 2020.
	Public funds to combat COVID-19 extraordinary credit of R$ 20 billion (US$ 3.45 billion) released for vaccination against Covid-19.
	Emergency employment maintenance programme: Workers with a suspended contract or reduced working hours and wages received compensation paid by the government
	Created tax debt renegotiation programmes (i.e. federative emergency financial aid to support states, the federal district and municipalities (MPV 978; complementary law 173); emergency employment and income maintenance benefit (MPV 935, 936)
	National support program for micro and small businesses (pronampe) - MPV 972, 997, 1.020; law 13.999, 14.042
	Emergency program to support jobs (PESE)
	Emergency program for access to credit - guarantee fund for investments (PEAC - FGI) - BNDES - MPV 975, 977
	Program special access to credit (peac - “maquininhas”) to incentivize self-employed and small and medium-sized companies
Social policies	From April 2020 to July 2020: “Emergency aid” (US$ 107.45 for 3 months, per person, to support adults without formal employment, but who are in the condition of informal workers, individual microentrepreneurs (MEI) or social security contributors (up to have a monthly family income of less than half the minimum wage per capita or three minimum wages in total and not be a beneficiary of other social programs or unemployment insurance)
	From April 2021, the workers will be paid 4 monthly installments of R$ 250.00 (US$ 44.72). People who live alone are entitled to 4 monthly installments of R$ 150.00 (US$ 26.83). A single parent family is entitled to 4 monthly installments of R$375.00 (US$ 67.00). Each family can receive only 1 type of benefit
	Increased resources to bolsa família program (BF) beneficiaries
	Monoparental women can receive R$ 1200 (US$ 214.17)
	Anticipation of part of the continuous cash benefit (BPC; cash assistance for the elderly and for low-income people with disabilities) for people with disabilities and sickness benefits

^aNote: Adapted from ECLAC (2021c); Diniz et al. (2020), Ministério da Economia (2021), Ministério da Cidadania (2021), Brazilian Central Bank (BACEN, 2021).

ORCID iDs

Igor Santos Tupy https://orcid.org/0000-0003-3894-0340

Fernanda Faria Silva https://orcid.org/0000-0003-0871-4502

Gustavo Figueiredo Campolina Diniz https://orcid.org/0000-0002-2626-0260

Rosa Livia Montenegro https://orcid.org/0000-0001-8383-5131

Alexandre de Queiroz Stein https://orcid.org/0000-0002-9978-6917

Diogo Ferraz https://orcid.org/0000-0003-4037-7171