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Further Evidence on Wage and Productivity Differentials in Brazil

Author

Listed:
  • Alexandre Rands

    (Datamétrica Consultoria, Pesquisa e Telemarketing)

  • Marcelo Eduardo A. da Silva

    (Datamétrica Consultoria, Pesquisa e Telemarketing)

Abstract

This paper discusses the relationship between the elasticities of wages and productivity with respect to human capital. The goal is to search if there is a distortion on the expected relationship between these two variables, given market forces and a selfish behavior by agents, as it is found in some Europeans countries. A general equilibrium, overlapping generation model that can capture the relationship between these two elasticities is presented. Two equations that emerge from this model are estimated, using data from RAIS and IBGE Pesquisa Industrial Annual for 2000. The results indicate that local labor market attenuates income inequality, transferring income from more qualified to less qualified workers, similarly to what happens in European labor markets.

Suggested Citation

  • Alexandre Rands & Marcelo Eduardo A. da Silva, 2003. "Further Evidence on Wage and Productivity Differentials in Brazil," Working Papers 34, Datamétrica Consultoria Econômica, revised 2003.
    • Handle: RePEc:dtm:wpaper:34
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    References listed on IDEAS

    as
    1. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 255-283.
    2. Alan B. Krueger & Mikael Lindahl, 1998. "Education for Growth in Sweden and the World," Working Papers 790, Princeton University, Department of Economics, Industrial Relations Section..
    3. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555, Elsevier.
    4. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(1), pages 35-52.
    5. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    6. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    7. Francisco de Hollanda Guimarães Ferreira, 2000. "Os determinantes da desigualdade de renda no Brasil: Luta de classes ou heterogeneidade educacional?," Textos para discussão 415, Department of Economics PUC-Rio (Brazil).
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    More about this item

    Keywords

    Productivity; wages; general equilibrium;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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