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Some Stylized Facts Of The Informal Sector In Brazil In The Last Two Decades

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  • Fabio Veras Soares

Abstract

Two facts have characterized the evolution of the informal sector in Brazil during the last two decades: the increase in the proportion of non-registered workers and the diminishing wage gap between non-registered and registered workers. In this paper, we document both the increase of the informal sector and the fall in the wage gap in Brazil. Besides, we investigate which factors were responsible for the fall in the wage gap and how this reduction has contributed to reduce wage inequality between 1981 and 1999. Among our findings, we would highlight: 1) the coincidence between these two movements and the market-oriented reforms of the early 1990's; 2) that the fall in the formal/informal wage gap has substantially contributed to the decrease in wage inequality. After education, the fall in the wage premium due to the possession of a work-card was the main responsible for bringing down wage inequality. Why and how it happened is an open debate. We speculate that the trade liberalization process of the early 1990's and the increasing indexation of informal sector wages to the minimum wage may be behind these phenomena.

Suggested Citation

  • Fabio Veras Soares, 2004. "Some Stylized Facts Of The Informal Sector In Brazil In The Last Two Decades," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32nd Brazilian Economics Meeting] 142, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    • Handle: RePEc:anp:en2004:142
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    File URL: http://www.anpec.org.br/encontro2004/artigos/A04A142.pdf
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    1. Paola Salardi, 2016. "The Evolution of Gender and Racial Occupational Segregation Across Formal and Non‐Formal Labor Markets in Brazil, 1987 to 2006," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(S1), pages 68-89, August.

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    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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