last years a firm is observed in the data. Since RAIS does not directly contain the entry year for each firm, we compute age considering that a firm’s entry year is the earliest observed admission year reported for workers in that firm.<sup>3</sup> We correct these age measures whenever they are inconsistent with the entry observed in our sampled period.

To define state-owned firms, we primarily use firms’ legal nature information available in RAIS. The problem of using only legal nature is that it omits a large footprint of the state via investing in private firms. Therefore, we complement our analysis by identifying private firms with government participation using ownership information from the Orbis database available for 2019. Specifically, we define three types of BOS based on the magnitude of state participation within a firm: public, mixed, and participated firms. Using the information on the legal nature of firms provided in RAIS, we identify fully public and mixed-capital firms (those where the government owns the majority of voting shares). Participated firms are defined as private firms with minority state participation.<sup>4</sup> These are firms for which state ownership is identified through the Orbis database but that are classified as fully private in RAIS.<sup>5</sup> Whenever we generally speak of BOS, we are referring to the definition that encompasses all these three groups of firms, unless stated otherwise.

Table 1 details the merge of firms with state participation in Orbis with the RAIS dataset. Of 1,302 firms with state ownership containing a valid Brazilian tax identifier in 2019, we can find 1,067 of these firms in RAIS within the same year (82%). Even though RAIS is supposed to be a census of all Brazilian firms in the formal sector, we cannot match 235 firms. Additionally, 323 of the matched firms did not report worker-level information in 2019, either because they had no active working contracts or halted operations during the reference year. Of the 1,067 matched companies, 129 are registered as fully public firms, and 238 are registered as mixed capital firms. We define as participated the 377 firms that are registered in RAIS as fully private firms but contain minority state participation as identified in Orbis. Table 2 presents the resulting number of firms by year in the sample, along with a decomposition between the number of privately-owned firms (POEs) and BOS, and their classification into each of the three BOS types after combining data from Orbis and legal nature information in RAIS.

Additionally, we use Orbis data combined with firm ownership structure information to obtain estimates for the share of government ownership in each BOS. Whenever firms are directly owned by the state, with only one public entity as the shareholder, we consider the percentage of government ownership provided by Orbis or by other sources used to validate

> 3 When computing age, we use data from 1996 to 2020.

> 4We only consider firms as participated when direct or indirect state participation is at least 10%.

> 5At this time, we only have access to firms with state participation in Orbis for the year 2019. We match these firms with information in RAIS for all years used in the analysis, from 2010 to 2020.

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