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Human Capital and the Recent Fall of Earnings Inequality in Brazil

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  • Tavares, Priscilla Albuquerque
  • Menezes-Filho, Naércio Aquino

Abstract

Earnings inequality has started to fall in Brazil in recent years, after remaining very high for decades. We describe this decline using a flexible decomposition technique and assess the contributions of education and experience. We conclude that the fall in education earnings differentials and the decline in the dispersion within demographic groups are the main factors leading to the reduction of inequality in Brazil. The paper demonstrates the powerful impact that education can have to reduce inequality.

Suggested Citation

  • Tavares, Priscilla Albuquerque & Menezes-Filho, Naércio Aquino, 2011. "Human Capital and the Recent Fall of Earnings Inequality in Brazil," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 31(2), December.
    • Handle: RePEc:sbe:breart:v:31:y:2011:i:2:a:7236
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    2. Ferreira, Francisco H. G. & Leite, Phillippe G. & Litchfield, Julie A., 2008. "The Rise And Fall Of Brazilian Inequality: 1981–2004," Macroeconomic Dynamics, Cambridge University Press, vol. 12(S2), pages 199-230, September.
    3. Marco Manacorda & Carolina Sanchez-Paramo & Norbert Schady, 2010. "Changes in Returns to Education in Latin America: The Role of Demand and Supply of Skills," ILR Review, Cornell University, ILR School, vol. 63(2), pages 307-326, January.
    4. Thomas Lemieux, 2006. "Postsecondary Education and Increasing Wage Inequality," American Economic Review, American Economic Association, vol. 96(2), pages 195-199, May.
    5. Menezes-Filho, Naercio Aquino & Fernandes, Reynaldo & Picchetti, Paulo, 2006. "Rising Human Capital but Constant Inequality: The Education Composition Effect in Brazil," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 60(4), February.
    6. Ram, Rati, 1990. "Educational Expansion and Schooling Inequality: International Evidence and Some Implications," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 266-274, May.
    7. Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June.
    8. Amanda Gosling & Stephen Machin & Costas Meghir, 2000. "The Changing Distribution of Male Wages in the U.K," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 635-666.
    9. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Rising Wage Inequality: The Role of Composition and Prices," NBER Working Papers 11628, National Bureau of Economic Research, Inc.
    10. Knight, J B & Sabot, R H, 1983. "Educational Expansion and the Kuznets Effect," American Economic Review, American Economic Association, vol. 73(5), pages 1132-1136, December.
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    Cited by:

    1. Hartmann, Dominik & Jara-Figueroa, Cristian & Kaltenberg, Mary & Gala, Paulo, 2019. "Mapping stratification: The industry-occupation space reveals the network structure of inequality," Hohenheim Discussion Papers in Business, Economics and Social Sciences 06-2019, University of Hohenheim, Faculty of Business, Economics and Social Sciences.

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