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Labor modernization expected to generate 1.5 million jobs, study says

Structural reforms

Itaú Unibanco assesses impacts of changes in legislation. In addition to more employment, expectation is to increase the country's wealth

With the modernization of labor laws, experts are optimistic about the potential impacts for the country. For Itaú Unibanco, 1.5 million jobs are expected to be generated in the next four years with just the change in legislation.

The expectation is also that Brazil generates more wealth. The per capita Gross Domestic Product (GDP), according to the bank's study, will be positively influenced in the period, with an extra increase of 0.8% each year.

Last Friday (4), the institution published a research on the subject. The assessment is that the reform will also improve competitiveness. In an international comparison on labor market efficiency, Brazil currently occupies the 117th position among 138 countries. With the modernization, the country must ascend to the post 86.

"In international comparisons, Brazil today stands out for having one of the most inefficient labor markets in the world," says the study by Itaú Unibanco. "We estimate that labor reform can increase Brazilian GDP per capita by 3.2% in the next four years (0.8% per year) and reduce the structural unemployment rate by around 1.4 percentage points [approximately 1.5 Million jobs], "he explains.

Other reforms

For the bank, the reform improves the level of competitiveness, but it is possible to advance further. According to the research done for the institution, changes are needed on other fronts, such as quality of institutions, macroeconomic environment, tax reform and changes in infrastructure - actions that the government has worked to implement.