Segmentation of Brazilian labor market and manpower allocation between agricultural and non-agricultural sectors from 2004 to 2009 Priscila Casari Carlos José Caetano Bacha FACE – UFG, ESALQ – USP, Introduction The aim of this paper is to evaluate the impact of sectoral segmentation between agricultural and non-agricultural sectors on the allocation of manpower in the Brazilian labor market from 2004 to The labor market segmentation reduces the mobility of workers among sectors, changing the allocation of workers and generating income differential among them. Methodology To evaluate the effects of labor market segmentation on the allocation of the individuals, these are separated into the following groups according to their experience in the agricultural sector or in other economic sectors:  Occupied - agriculture: individuals that work in agricultural activities;  Occupied – non-agriculture: individuals employed in other sectors;  Unemployed - agriculture: unemployed individuals that had the last occupation less than a year ago in agricultural activities;  Unemployed – non-agriculture: unemployed individuals that had the last occupation less than a year ago in other sectors;  Unemployed - first job: unemployed individuals that have never been occupied;  Unemployed - unoccupied for more than a year: unemployed individuals that had the last occupation more than one year ago;  Inactive: individuals not employed or unemployed. As, among the seven groups proposed, there is no ordering the multinomial logit is the appropriate method to estimate the determinants of the allocation of the individuals in the various groups, according to Greene (1997). For the best model fit control variables are included for the effects of place of residence, socioeconomic characteristics of the individual or household and related to the years analyzed. Data used are from the National Sample Survey of Households (PNAD) Results Considering the population that is more than ten years old (population in working age – PIA) in Brazil, in the period , 56.61% were employed, 5.46%, unemployed and 37.93%, inactive. If selected only the economically active population (PEA), the unemployed would be 8.80%. Of the 56.61% occupied, percentage points correspond to the occupied in agriculture and percentage points are occupied in other sectors. For the 5.46% unemployed, 0.12 percent are unemployed in agriculture; 2.07 pp in other sectors; 1.63 pp are seeking their first job, and 1.64 percentage point is in the group of unoccupied for more than a year. Socioeconomic characteristics are decisive for the allocation of workers, and the results obtained confirm the segmentation between agricultural and non-agricultural sectors. The socioeconomic characteristics associated with segmentation are: schooling, indigenous, spouse, urban and metropolitan area. One can then conclude that these characteristics reduce worker mobility between the agricultural and non-agricultural sectors and are used to determine the filling of jobs in the primary or secondary sectors. In Brazil, the segmentation of labor market leads to higher probabilities of allocating individuals with less formal education, spouses or who live in rural areas in the agricultural sector. The results of segmentation are different income and working conditions even for comparable individuals, leading to underemployment of good workers. In the Brazilian case, individuals with less schooling, spouses and people who live in rural areas increase their likelihood of employment or unemployment in the agricultural sector due to the segmentation of the labor market. Final remarks To minimize the consequences of segmentation and increase the welfare of the worker, policies could be implemented to increase the mobility of workers between sectors. As the results show that individuals with less education, spouses and who live in rural areas are more likely to be employed in the agricultural sector due to the segmentation of the labor market, policies should focus on these individuals. Policies that could be implemented are: the promotion of schooling of workers of agriculture and rural residents; the increase of geographical mobility to reduce the impact of living in rural areas or the improvement of public transportation between rural and urban and between rural and metropolitan areas; the encouragement of non- agricultural enterprises to settle in rural areas; and policies that help the inclusion of spouses in the non-agricultural labor market.