Nova Economia (Jun 2009)
Em busca de incentivos para atrair o trabalhador autônomo para Previdência Social
Abstract
This paper intends to show that economic incentives can affect the decisions of self-employed people whether to join or not the Brazilian socialsecurity system using a Principal-Agent framework. Relaxation of the rules for low income workers to access social security benefitspromoted by the Federal Constitution of 1988 provides a laboratory to test such a model. The empirical analysis, however, contradicts the expectations of the theoretical model. There is a general movement of withdrawal from the social security system yet this movement is more pronounced at the richest self-employed group. In theoretical terms, this is explained by a violation of the incentive compatibility constraints. One possible explanation is that the increase in the availability of private pension funds in the market has created competition for the government system.
