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Race Discrimination or Inequality of Opportunities: The Brazilian Case

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  • Philippe G. Leite

Abstract

Following the topics discussed by Campante et al (2004), this paper contributes to the literature of the Brazilian racial discrimination by isolating the effect of intergeneration transmission of schooling and the school’s quality in the race discrimination effect. Instead of modelling just one mincer-type equation like others papers, it was decided to use the Two Stage Least Square Model where the first step of modelling control the endogeneity of individual schooling instrumenting it by family background and ability tests while attending school. The paper also provide a comparative profile of urban racial discrimination in the Northeast and the Southeast recognizing the important differences across regions in Brazil both in terms of economic development and racial composition of the population. As found by Campante et al (2004), results reveal that part of the component of wage differentials ordinarily attributed to labor market discrimination is actually explained by persistent educational inequalities between races. However because they didn’t control the potential bias due to the endogeneity of some variables, their discrimination effect is 15 to 19 percentage points higher than it should be. The mechanism of intergeneration transmission is correlated with financial constraints and higher education of parents because blacks have lower elasticities of education with respect to parent’s education due to selection and causation. Even controlling the model using instruments, Private sector remains as the sector where race discrimination is really an issue. Moreover, the regional profile suggests that the labor market is a more important locus of the racial issue in the Southeast than in the Northeast, although the significant presence in both regions. However, we are not controlling for selection bias and consequently the results must be viewed with caution because it is not sure how precise the estimations are.

Suggested Citation

  • Philippe G. Leite, 2005. "Race Discrimination or Inequality of Opportunities: The Brazilian Case," Ibero America Institute for Econ. Research (IAI) Discussion Papers 118, Ibero-America Institute for Economic Research.
    • Handle: RePEc:got:iaidps:118
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    File URL: http://www2.vwl.wiso.uni-goettingen.de/ibero/working_paper_neu/DB118.pdf
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    References listed on IDEAS

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    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Bruce Sacerdote, 2002. "The Nature and Nurture of Economic Outcomes," American Economic Review, American Economic Association, vol. 92(2), pages 344-348, May.
    3. Fran??ois Bourguignon & Francisco H. G. Ferreira & Phillippe G. Leite, 2002. "Beyond Oaxaca-Blinder: Accounting for Differences in Household Income Distributions Across Countries," William Davidson Institute Working Papers Series 478, William Davidson Institute at the University of Michigan.
    4. Erik Plug, 2004. "Estimating the Effect of Mother's Schooling on Children's Schooling Using a Sample of Adoptees," American Economic Review, American Economic Association, vol. 94(1), pages 358-368, March.
    5. Kenneth Arrow, 1971. "The Theory of Discrimination," Working Papers 403, Princeton University, Department of Economics, Industrial Relations Section..
    6. Alexandre Rands & Juliana Ferraz Guimaraes & Tiago V. de Vasconcelos Cavalcanti, 2000. "Is There Racial Wage Discrimination in Brazil? A new sample with proxies for family background and ability," Working Papers 10, Datamétrica Consultoria Econômica, revised 2000.
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    Cited by:

    1. Salardi, Paola & Ñopo, Hugo R., 2009. "Gender and Racial Wage Gaps in Brazil 1996-2006: Evidence Using a Matching Comparisons Approach," IDB Publications (Working Papers) 1649, Inter-American Development Bank.
    2. Carlos Gradín, 2014. "Race and Income Distribution: Evidence from the USA, Brazil and South Africa," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 73-92, February.
    3. Carlos Gradin, 2009. "Why is Poverty So High Among Afro-Brazilians? A Decomposition Analysis of the Racial Poverty Gap," Journal of Development Studies, Taylor & Francis Journals, vol. 45(9), pages 1426-1452.
    4. Mauricio Reis, 2017. "Fields of Study and the Earnings Gap by Race in Brazil," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 756-785, August.

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    More about this item

    Keywords

    Racial discrimination; Intergeneration Mobility; Labour Market; Public Policy; Regional differences; Education;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • 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
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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