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Income Inequality Reduction in Brazil: A Pseudo-panel Approach in the Search of its Determinants

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  • Barufi, Ana Maria

Abstract

Ever since the late 1990`s personal income inequality has shown a steady decrease in Brazil. Most of the investigations of this phenomenon are restricted to the analysis of aggregated information along the years. This paper tries to identify the main factors for it, using microdata of the National Household Sample Survey (PNAD) for the period 1995-2009. The years have been chosen in order to allow an evaluation of different economic and political contexts and a pseudo-panel based on age-state cohorts is built to compare the effect of transfers (social programs and retirement), wage increases and regional specific factors in the decrease of income inequality. The pseudo-panel is essential to control for unobservable characteristics of the head of the household and is an option for the lack of true panel data information in Brazil. In spite of the overall improvement of households’ lives in the country, regional inequalities persist and remain to be assessed in the following decades. However, it is noticeable the essential role of social transfers to reduce poverty (at least in the short-run) and induce the inequality reduction.

Suggested Citation

  • Barufi, Ana Maria, 2012. "Income Inequality Reduction in Brazil: A Pseudo-panel Approach in the Search of its Determinants," TD NEREUS 11-2012, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    • Handle: RePEc:ris:nereus:2012_011
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    References listed on IDEAS

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    1. Pedro Herculano Guimarães Ferreira de souza & Rafael Guerreiro Osorio, 2011. "A Redução das disparidades Regionais e a Queda da Desigualdade Nacional de Renda (1981-2009)," Discussion Papers 1648, Instituto de Pesquisa Econômica Aplicada - IPEA.
    2. Raul Silveira Neto & Carlos Azzoni, 2011. "Non-Spatial Government Policies and Regional Income Inequality in Brazil," Regional Studies, Taylor & Francis Journals, vol. 45(4), pages 453-461.
    3. Carlos A. Azzoni & Naercio Menezes-Filho & Tatiana de Menezes & Raúl Silveira-Neto, 2000. "Geography and Income Convergence among Brazilian States," Research Department Publications 3096, Inter-American Development Bank, Research Department.
    4. Carlos R. Azzoni & Naércio A. Menezes-Filho & Tatiane Menezes, 2003. "Opening the Convergence Black Box: Measurement Problems and Demographic Aspects," WIDER Working Paper Series DP2003-56, World Institute for Development Economic Research (UNU-WIDER).
    5. Attanasio, Orazio P & Browning, Martin, 1995. "Consumption over the Life Cycle and over the Business Cycle," American Economic Review, American Economic Association, vol. 85(5), pages 1118-1137, December.
    6. Tatiane Menezes & R. Silveira-Neto & Carlos Azzoni, 2012. "Demography and evolution of regional inequality," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 643-655, December.
    7. Browning, Martin & Deaton, Angus & Irish, Margaret, 1985. "A Profitable Approach to Labor Supply and Commodity Demands over the Life-Cycle," Econometrica, Econometric Society, vol. 53(3), pages 503-543, May.
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    Cited by:

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    More about this item

    Keywords

    income inequality; social transfers; pseudo-panel; Brazil;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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