No AccessSocial Protections and LaborFeb 2022
The Gini coefficient of labor earnings in Brazil fell by nearly a fifth between 1995 and 2012, from 0.50 to 0.41. The decline in other measures of earnings inequality was even larger, with the 90-10 percentile ratio falling by almost 40 percent. Applying micro-econometric decomposition techniques, this study parses out the proximate determinants of this substantial reduction in earnings inequality. Although a falling education premium did play a role, in line with received wisdom, this study finds that a reduction in the returns to labor market experience was a much more important factor driving lower wage disparities. It accounted for 53 percent of the observed decline in the Gini index during the period. Reductions in horizontal inequalities ? the gender, race, regional and urban-rural wage gaps, conditional on human capital and institutional variables ? also contributed. Two main factors operated against the decline: a greater disparity in wage premia to different sectors of economic activity, and the ?paradox of progress?: the mechanical inequality-increasing effect of a more educated labor force when returns to education are convex.
References
- . 2002. “Technical Change, Inequality and the Labour Market.” Journal of Economic Literature 40: 7—72. CrossrefGoogle Scholar
- . 2011. “Skills, Tasks and Technologies: Implications for Employment and Earnings.” Handbook of Labor Economics 4: 1043—1171. CrossrefGoogle Scholar
- . 2019. “Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework.” Latin America Economic Review 28 (18): 1—20. Google Scholar
- . 2015. “Worker Heterogeneity, Wage Inequality, and International Trade: Theory and Evidence from Brazil.” Job market paper. Massachusetts Institute of Technology, Cambridge, MA, USA. Google Scholar
- . 2015. “Recent Trends in Inequality and Poverty in Developing Countries.” In Handbook of Income Distribution, edited by AtkinsonA.B.BourguignonF., Vol. 2: 697—805. Amsterdam, the Netherlands: Elsevier. CrossrefGoogle Scholar
- . 2018. World Inequality Report 2018. Cambridge: Harvard University Press. CrossrefGoogle Scholar
- . 2018. “Firms and the Decline of Earnings Inequality in Brazil.” American Economic Journal: Macroeconomics 10 (1): 149—89. CrossrefGoogle Scholar
- . 2013. “Decomposing the Recent Inequality Decline in Latin America.” Working Paper No. 6715. World Bank, Washington, DC. Google Scholar
- . 2010. “Markets, the State and the dynamics of inequality in Brazil.” In Declining Inequality in Latin America: A Decade of Progress? edited by López CalvaLuis F.LustigNora, 134—74. Washington, DC: Brookings Institution and UNDP. Google Scholar
- . 2010. “Training and Age-Biased Technical Change.” Annals of Economics and Statistics 99/100: 317—42. CrossrefGoogle Scholar
- 1973. “Wage Discrimination: Reduced Form and Structural Estimates.” Journal of Human Resources 8: 436—55. CrossrefGoogle Scholar
- . 2005. The Microeconomics of Income Distribution Dynamics in East Asia and Latin America. Washington, DC: Oxford University Press and World Bank Publications. Google Scholar
- . 2015. “O Papel do Salärio Mínimo na Redução da Desigualdade na Distribuição de Renda no Brasil entre 1995 e 2013.” Doctoral dissertation, Universidade Federal Fluminense, Niterói, Brazil. Google Scholar
- . 2016. “Winners and Losers from a Commodities-for-Manufactures Trade Boom.” Journal of International Economics 102: 50—69. CrossrefGoogle Scholar
- . 1995. “How Much Inequality Can We Explain? A Methodology and an Application to the USA.” Economic Journal 105 (429): 421—30. CrossrefGoogle Scholar
- . 2018 “Efeitos do FUNDEF/B sobre frequência escolar, fluxo escolar e trabalho infantil: uma anälise com base nos Censos de 2000 e 2010.” Estudos Econômicos (São Paulo) 48 (1): 39—75. CrossrefGoogle Scholar
- . 2004. “ICT and Older Workers: No Unwrinkled Relationship.” International Journal of Manpower 27 (5): 467—90. CrossrefGoogle Scholar
- . 2014. “Trade Liberalization and Labor Market Dynamics.” Econometrica 82 (3): 825—85. CrossrefGoogle Scholar
- . 2017. “Trade Liberalization and Regional Dynamics.” American Economic Review 107 (10): 2908—46. CrossrefGoogle Scholar
- . 2017. “Earnings Inequality and the Minimum Wage: Evidence from Brazil.” Working Paper No. 6393. CESifo Economic Studies, Center for Economic Studies and Ifo Institute for Economic Research, Munich, Germany. Google Scholar
- . 2012. “Chapter 6 Influence Functions for Policy Impact Analysis.” In Inequality, Mobility and Segregation: Essays in Honor of Jacques Silber, in Research on Economic Inequality, edited by BishopJohn A.SalasRafael, Vol. 20: 135—59. Somerville, MA: Emerald Group Publishing Limited. CrossrefGoogle Scholar
- 2012. “Distributions in Motion: Economic Growth, Inequality, and Poverty Dynamics.” In The Oxford Handbook of the Economics of Poverty, edited by JeffersonPhilip N., 427—62. New York: Oxford University Press. CrossrefGoogle Scholar
- . 2017. “Ageing poorly? Accounting for the Decline in Earnings Inequality in Brazil, 1995–2012.” Working Paper No. 8018. The World Bank Washington, DC. Google Scholar
- . 2008. “The Rise and Fall of Brazilian Inequality: 1981–2004.” Macroeconomic Dynamics 12 (2): 199—230. CrossrefGoogle Scholar
- . 2013. Economic Mobility and the Rise of the Latin American Middle Class. Washington, DC: The World Bank. LinkGoogle Scholar
- . 2009. “Unconditional Quantile Regressions.” Econometrica 77 (3): 953—73. CrossrefGoogle Scholar
- . 2011. “Decomposition Methods in Economics.” Handbook of Labor Economics 4: 1—102. CrossrefGoogle Scholar
- . 2003. “The Impact of Technological Change on Older Workers: Evidence from Data on Computer Use.” Industrial and Labor Relations Review 56 (3): 511—29. CrossrefGoogle Scholar
- . 2004. “More on Identification in Detailed Wage Decompositions.” Review of Economics and Statistics 86 (4): 1034—6. CrossrefGoogle Scholar
- . 2011. “ Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework, 1990–2010. Policy Research working paper, no. WPS 5921. World Bank. https://openknowledge.worldbank.org/handle/10986/3696. Google Scholar
- . 2008. The Race Between Education and Technology. Cambridge: Harvard University Press. Google Scholar
- . 1974. “The Influence Curve and Its Role in Robust Estimation.” Journal of the American Statistical Association 69 (346): 383—93. CrossrefGoogle Scholar
- . 2012. “Labor’s Declining Share of Income and Rising Inequality.” Economic Commentary, 2012–13 (Federal Reserve Bank of Cleveland). Google Scholar
- . 2017. “The Labor Market Effects of an Educational Expansion: A Theoretical Model with Applications to Brazil.” Working Paper No. 220. Universidad Nacional de La Plata. Buenos Aires, Argentina. Google Scholar
- . 1983. “Educational Expansion and the Kuznets Effect.” American Economic Review 73 (5): 1132—6. Google Scholar
- . 1999. “Generating Extreme Inequality: Schooling, Earnings, and Intergenerational Transmission of Human Capital in South Africa and Brazil.” Research Report 99-439. Population Studies Center, University of Michigan, Ann Arbor. Google Scholar
- . 2010. Declining Inequality in Latin America: A Decade of Progress? Washington, DC: Brookings Institution and UNDP. Google Scholar
- . 2013. “Declining Inequality in Latin America in the 2000s: The Cases of Argentina, Brazil, and Mexico.” World Development 44: 129—41. CrossrefGoogle Scholar
- . 2014. Labor Formalization and Declining Inequality in Argentina and Brazil in the 2000s: A Dynamic Approach. Geneva: ILO. Google Scholar
- . 2016. “Distribution Effects of the Minimum Wage in Four Latin American Countries: Argentina, Brazil, Chile and Uruguay.” International Labour Review 155 (1): 97—131. CrossrefGoogle Scholar
- . 2018. Wage Inequality in Latin America. Understanding the Past to Prepare for the Future. Washington, DC: World Bank Publications. LinkGoogle Scholar
- . 2019. Twenty Years of Wage Inequality in Latin America. Washington, DC: The World Bank. LinkGoogle Scholar
- . 1982. “A Decomposition Analysis of the Trend in UK Income Inequality.” Economic Journal 92 (368): 886—902. CrossrefGoogle Scholar
- . 2015. “Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle-Income Countries.” In Handbook of Income Distribution, edited by AtkinsonA.B.BourguignonF., Vol. 2: 593—6. Amsterdam, the Netherlands: Elsevier. Google Scholar
- . 2012. New Century, Old Disparities: Gender and Ethnic Earnings Gaps in Latin America and the Caribbean. Washington, DC: World Bank Publications. LinkGoogle Scholar
- . 1973. “Male-Female Wage Differentials in Urban Labor Markets.” International Economic Review 14 (3): 693—709. CrossrefGoogle Scholar
- . 1999. “Identification in Detailed Wage Decompositions.” Review of Economics and Statistics 81 (1): 154—7. CrossrefGoogle Scholar
- . 2014. Capital in the Twenty-First Century. Cambridge: The Belknap Press of Harvard University Press. CrossrefGoogle Scholar
- . 2003. “Measuring Pro-Poor Growth.” Economics Letters 78: 93—9. CrossrefGoogle Scholar
- . 2012. The Price of Inequality: How Today’s Divided Society Endangers Our Future. New York: W.W. Norton & Company. CrossrefGoogle Scholar
- . 2016. “Decomposing Changes in Male Wage Distribution in Brazil.” Research in Labor Economics 44: 49—78. CrossrefGoogle Scholar
World Bank. 2016. Taking on Inequality: Poverty and Shared Prosperity Report 2016. Washington, DC: World Bank Publications. LinkGoogle Scholar- . 2005. “A Simple Solution to the Identification Problem in Detailed Wage Decompositions.” Economic Inquiry 43: 766—72. CrossrefGoogle Scholar
More Stories
Why Your Business Plan Won’t Make You Rich Or Famous
Home Based Business Ideas – How To Succeed Online
Private Label Cosmetics – You Need Your Own Cosmetics Brand