months worked correspond to the worker not having a formal job but we have no information as to whether the worker is unemployed, self-employed, working in an informal job, or out of the labor force, a caveat of the RAIS database also noted by Dix-Carneiro & Kovak (2019).

The RAIS database includes for each worker and job spell information on detailed occupation categories. Following Gerard, Naritomi, & Silva (2021) we use the correspondence table developed by Helpman et al. (2017) to convert the Brazilian classification of occupations at the 4-digit level into the following five occupation categories: Professional and Managerial, Skilled White Collar, Skilled Blue Collar, Unskilled White Collar, and Unskilled Blue Collar. Where necessary, we group the first three categories as skilled workers and the last two categories as unskilled workers.

To better capture worker unemployment in Brazil, we use unique data from the Brazilian Unemployment Insurance (UI) registry (Seguro de Desemprego) for the 2004-2017 period. This is a longitudinal individual-level database covering all Brazilian workers that have received unemployment insurance during this period. A worker is eligible to receive unemployment insurance if he/she is laid off from a private formal job and has at least six months of job tenure at layoff. The UI registry includes information on the amount paid, separation date, paid date, and the number of months each worker receives unemployment benefits. We link the RAIS database to the UI registry through the individual unique worker identifier which is included in all years for all workers. This data allows us to measure the duration of unemployment for each worker and the amount of UI received.<sup>10</sup> To further assess compensation mechanisms for workers in Brazil, we link our worker panel database to longitudinal administrative data over the 2007-2012 period from the national registry of low-income households (Cadastro Unico), linked to all the payment records of the Bolsa Familia cash transfer program (PBF) (Folhas de Pagamento) through the individual unique identifier as in RAIS. This administrative database is collected by the Brazilian Ministry of Social Development. The database covers the universe of PBF recipients along with all the benefits disbursed through the program. We use information on the amount and number of months each worker received cash from the PBF program.<sup>11</sup> To capture the potential role of worker training, we link our worker panel database to longitudinal administrative data over the 2009–2012 period on training provision collected by Brazil’s main training provider of training for the manufacturing sector—Servico Nacional de Aprendizagem Industrial (SENAI)—the training arm of the national confederation of Industry (CNI). This provider is financed by a tax charged to all Brazilian firms equal to 1% of their wage bill. SENAI is the fifth largest training provider in the world (Silva et al. (2015), Bastos et al. (2016)). From these data, we extracted information on the set of workers trained in

> 10Gerard & Gonzaga (2021) for details on unemployment insurance in Brazil.

> 11See Gerard, Naritomi, & Silva (2021) for further details on the PBF program and the interaction between the program and formal labor markets.

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