FGV study shows that 13 million Brazilians climbed the social ladder in less than two years

During a 21-month period ending this May, some 13.3 million Brazilians moved upward into the A, B and C socio-economic classes. According to a study entitled “The Emerging of the Emerging,” by the Getulio Vargas Foundation (“FGV”), “a transformation of great magnitude is taking place in Brazil.” Marcelo Neri, who coordinated the study, attributes the transformation to increased income since 2003 and a corresponding, consistent drop in inequality for a whole decade. Neri says the reasons for less inequality and more income are economic stability and inflation control. Another important factor has been better education in Brazil, he adds.

“[FGV calculations show that] improvements in education alone, as a constant factor, have raised income by around 2.2 percentage points annually. Education policy is the principal underlying reason for this [social ascendancy],” declared Neri.

The FGV study found a recent spike as the upper classes (A and B) expanded 12.8%, and the C class got 11.1% bigger. However, a longer look, over the period since 2003, shows a bigger shift: over 48 million Brazilians moved upward.

Neri says there was a significant shrinking in the lowest rungs on the social ladder: the D and E classes. In 2003, there were over 96 million Brazilians at the bottom of the pyramid. Today they number around 63.6 million. On the other hand, the size of the C class went from 45 million to over 105 million. And he explains the main reason for the reduction in the size of the lowest, E class, was the government subsidy program for the very poor, Bolsa Familia. As for the expansion of the middle class (C ) it has been going on since the mid 1990s, when the Real Plan was implanted and brought inflation under control, concluded Neri.