In 2021, per capita household income falls to the lowest level since 2012

  • Summary

  • The average monthly real household income per capita in 2021 was R$ 1,353, the lowest value of the Continuous PNAD historical series, which began in 2012. As a result, the mass of real monthly household income per capita fell by 6.2% compared to 2020, reaching R$ 287.7 billion in 2021, its second lowest value since 2012 (R$ 279.9 billion).
  • Among the regions, the Northeast has the lowest average monthly household income per capita (R$ 843).
  • The percentage of people with income in the country’s population dropped from 61.0% in 2020 to 59.8% in 2021, the same percentage as in 2012 and the lowest in the series. The drop in this indicator was more intense in the North.
  • The real average monthly income of the resident population with income was the lowest in the historical series in the following types: all sources of income (R$ 2,265), other sources (R$ 1,348), retirement and pension (R$ 1,959) and in other income (R$ 512). Such declines can also be explained by inflation.
  • From 2020 to 2021, despite the increase in the employed population, the mass of real monthly income from all jobs fell by 3.1%, from R$223.6 billion to R$216.7 billion in the period.
  • From 2020 to 2021, the percentage of households with someone receiving “Other social programs”, a category that includes emergency aid, dropped from 23.7% to 15.4%, while the proportion of households with Bolsa-Família beneficiaries increased from 7.2% to 8.6%.
  • The drop in monthly household income per capita was more intense among the lower income classes.
  • In 2021, the average income of the 1% of the population that earns the most was 38.4 times higher than the average income of the 50% that earn the least.
  • Inequality grew for the population as a whole and remained practically stable for the employed population: the Gini Index of per capita household income increased from 0.524 to 0.544, while the Gini of income from all jobs varied from 0.500 to 0.499.
Changes in emergency aid rules and inflation explain the drop in household income per person in 2021 – Photo: Marcelo Casal Jr/Agência Brasil

The average monthly household income per person fell by 6.9% in 2021 and went from R$1,454 in 2020 to R$1,353. This is the lowest value of the historical series, started in 2012, of the Continuous National Survey by Household Sample (PNAD): Income from all sources 2021, released today (10) by the IBGE. North and Northeast were the regions that presented the lowest values ​​(R$ 871 and R$ 843, respectively) and also the highest losses between 2020 and 2021 (from 9.8% and 12.5%, in that order). The South and Southeast regions remained with the highest incomes (R$ 1,656 and R$ 1,645, respectively).

“This result is explained by the fall in the average income from work, which retracted even with the occupancy level starting to recover, and also by the decrease in income from other sources, except rent”, explains Alessandra Scalioni, research analyst, pointing out the change in the criteria for granting emergency aid that took place in 2021 as one of the main causes of the drop in income from other sources.

The percentage of people with some income, of any type, in the population of the country also dropped: from 61% to 59.8%, returning to the percentage of 2012, the lowest in the series. There was a reduction in all regions, mainly in the North. The South (64.8%) continues with the highest estimate, as in all the years of the historical series. The smallest are in the North (53.0%) and Northeast (56.3%).

This percentage increased in “All jobs” from 40.1% to 41.1%, which corroborates the increase in occupancy in the country. On the other hand, there was a drop in the percentage of people with income in the group of “Other sources”, which dropped from 28.3% to 24.8%. The biggest change was in “Other income”, which went from 14.3% to 10.6%.

In the division of the share of household income between types of income, only the contribution of the item “Other income” fell from 2020 to 2021, reaching 4%. The income from “All jobs” reached 75.3%, while “Retirement and Pension” represented 18.2%, “Rental and Lease” reached 1.7% and “Food, Donation and Allowance for non-residents” reached 0.9%. “There was an important increase in Other income in the first year of the pandemic, 2020, due to the increase in the item ‘Other Social Programs’, where emergency aid was classified. The changes that have taken place in the grant criteria and aid amounts in 2021 explain this type of income losing importance. There are fewer people earning and the value has also decreased”, explains the analyst.

Two of the five types of income are at the lowest level in the historical series

The PNAD Contínua income module also disclosed that in 2021, two types of income reached the lowest average monthly value in the historical series: Retirement and Pension (R$1,959) and Other income (R$512). Thus, the item “Other sources”, which includes, in addition to these, rent and lease (R$ 1,814) and alimony, donation and non-resident’s allowance (R$ 667), had an average of R$ 1,348, also reaching the lowest value in the series.

These drops explain why the global index, which measures the average monthly income of the population with income considering all sources, also reached the lowest value in the historical series: R$ 2,665

For the research analyst, inflation helps to explain these drops. “Retirement values ​​follow the minimum wage readjustment and most retirees earn the minimum wage. As the readjustments are not compensating for inflation, this loss of value is natural”, says Scalioni. The item other income is also explained with changes in concessions and emergency aid amounts.

Inequality grows, except for income from all jobs

The survey also shows income inequality in the country in 2021. After relative stability in 2019 (0.544) and a drop in 2020 (0.524), the Gini index of the average monthly household income per person increased in 2021, returning to the level of two years before (0.544). The higher the Gini, the greater the inequality.

Between 2020 and 2021, inequality increased in all regions, especially in the North and Northeast. Alessandra Scalioni explains: “These are regions where the receipt of emergency aid reached a greater proportion of households during the COVID-19 pandemic and which, therefore, may have been more affected by the changes in the program that took place in 2021”. The Northeast Region had the highest Gini index in 2021 (0.556), while the South Region had the lowest (0.462).

With regard only to the average monthly income of all jobs, the index varied negatively from 0.500 to 0.499. This result demonstrates that the return of part of the employed population in 2021 reduced the average income and did not change the profile of the distribution of income from work in the country.

When the analysis is stratified into classes of percentage of people in ascending order of household income per person – that is, from those who receive the least to those who receive the most, the research shows that approximately half of the population with the lowest incomes received, on average, R R$ 415, a decrease of 15.1% compared to 2020 (R$ 489), resulting in the lowest value in the historical series.

In 2021, the drop in monthly income per person was widespread among the classes, however, it was greater among the lower income groups. Among the 5% with the lowest income (R$ 39) it fell by 33.9% and among the 5% to 10% (R$ 148) it fell by 31.8%. Among the 1% with the highest income (R$ 15,940) it fell by 6.4%.

That is, in 2021, the 1% of the Brazilian population with the highest income had an income 38.4 times higher than the average of the 50% with the lowest wages.