IDEAS home Printed from https://ideas.repec.org/p/unu/wpaper/wp-2018-157.html
   My bibliography  Save this paper

Earnings inequality in the Brazilian formal sector: The role of firms, education, and top incomes 1994-2015

Author

Listed:
  • Marcelo Neri
  • Cecilia Machado
  • Valdemar Pinho Neto

Abstract

This paper documents the evolution and the determinants of earnings inequality in the Brazilian formal sector from 1994 to 2015, using establishment level data. In 2015, schooling explained 33 per cent of overall inequality. Firm-specific effects explain 65 per cent of total inequality level and 76 per cent of the inequality fall observed. The downward inequality trend parallels the one seen in household surveys. However, the distributive decompression goes only until the 90th percentile, which is in line with Personal Income Tax based evidence.

Suggested Citation

  • Marcelo Neri & Cecilia Machado & Valdemar Pinho Neto, 2018. "Earnings inequality in the Brazilian formal sector: The role of firms, education, and top incomes 1994-2015," WIDER Working Paper Series wp-2018-157, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2018-157
    as

    Download full text from publisher

    File URL: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2018-157.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    2. David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 967-1015.
    3. Arden Finn & Murray Leibbrandt & David Lam, 2015. "Schooling inequality, returns to schooling, and earnings inequality: Evidence from Brazil and South Africa," WIDER Working Paper Series 050, World Institute for Development Economic Research (UNU-WIDER).
    4. Marcelo Neri & José Márcio Camargo, 1999. "Distributive effects of Brazilian structural reforms," Textos para discussão 406, Department of Economics PUC-Rio (Brazil).
    5. Kakwani, Nanak & Neri, Marcelo Côrtes & Son, Hyun H., 2010. "Linkages Between Pro-Poor Growth, Social Programs and Labor Market: The Recent Brazilian Experience," World Development, Elsevier, vol. 38(6), pages 881-894, June.
    6. Jorge Alvarez & Felipe Benguria & Niklas Engbom & Christian Moser, 2018. "Firms and the Decline in Earnings Inequality in Brazil," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(1), pages 149-189, January.
    7. Niklas Engbom & Christian Moser, 2022. "Earnings Inequality and the Minimum Wage: Evidence from Brazil," American Economic Review, American Economic Association, vol. 112(12), pages 3803-3847, December.
    8. Carlos Henrique L. Corseuil & Rodrigo L. Moura, 2009. "Determinantes da Expansão do Emprego Formal: O que Explica o Aumento do Tamanho Médio dos Estabelecimentos?," Discussion Papers 1450, Instituto de Pesquisa Econômica Aplicada - IPEA.
    9. Nicholas Rohde, 2016. "J-divergence measurements of economic inequality," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(3), pages 847-870, June.
    10. Foster, James E., 1983. "An axiomatic characterization of the Theil measure of income inequality," Journal of Economic Theory, Elsevier, vol. 31(1), pages 105-121, October.
    11. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    12. David Lam & Arden Finn & Murray Leibbrandt, 2015. "Schooling Inequality, Returns to Schooling, and Earnings Inequality: Evidence from Brazil and South Africa," WIDER Working Paper Series wp-2015-050, World Institute for Development Economic Research (UNU-WIDER).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marcelo Neri, 2018. "What are the main drivers of Brazilian income distribution changes in the new millennium?," WIDER Working Paper Series wp-2018-186, World Institute for Development Economic Research (UNU-WIDER).
    2. Marcelo Neri, 2018. "What are the main drivers of Brazilian income distribution changes in the new millennium?," WIDER Working Paper Series 186, World Institute for Development Economic Research (UNU-WIDER).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marcelo Neri & Cecilia Machado & Valdemar Neto, 2018. "Earnings inequality in the Brazilian formal sector: The role of firms, education, and top incomes 1994–2015," WIDER Working Paper Series 157, World Institute for Development Economic Research (UNU-WIDER).
    2. Marcelo Neri, 2018. "What are the main drivers of Brazilian income distribution changes in the new millennium?," WIDER Working Paper Series wp-2018-186, World Institute for Development Economic Research (UNU-WIDER).
    3. Marcelo Neri, 2018. "What are the main drivers of Brazilian income distribution changes in the new millennium?," WIDER Working Paper Series 186, World Institute for Development Economic Research (UNU-WIDER).
    4. Moser, Christian, 2016. "How Could Wage Inequality Within and Across Enterprises be Reduced?," MPRA Paper 95381, University Library of Munich, Germany.
    5. Carlos Gradín, 2020. "Quantifying the contribution of a subpopulation to inequality an application to Mozambique," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(3), pages 391-419, September.
    6. Casilda Lasso de la Vega & Ana Urrutia & Oscar Volij, 2011. "An Axiomatic Characterization Of The Theil Inequality Order," Working Papers 1103, Ben-Gurion University of the Negev, Department of Economics.
    7. Christopher Cornwell & Ian M. Schmutte & Daniela Scur, 2021. "Building a Productive Workforce: The Role of Structured Management Practices," Management Science, INFORMS, vol. 67(12), pages 7308-7321, December.
    8. Frankel, David M. & Volij, Oscar, 2011. "Measuring school segregation," Journal of Economic Theory, Elsevier, vol. 146(1), pages 1-38, January.
    9. Niklas Engbom & Christian Moser, 2017. "Returns to Education through Access to Higher-Paying Firms: Evidence from US Matched Employer-Employee Data," American Economic Review, American Economic Association, vol. 107(5), pages 374-378, May.
    10. Jorge Pérez Pérez & José G. Nuño-Ledesma, 2024. "Workers, Workplaces, Sorting, and Wage Dispersion in Mexico," Working Papers 2024-06, Banco de México.
    11. Engbom, Niklas & Moser, Christian & Sauermann, Jan, 2023. "Firm pay dynamics," Journal of Econometrics, Elsevier, vol. 233(2), pages 396-423.
    12. Moser, Christian & Saidi, Farzad & Wirth, Benjamin & Wolter, Stefanie, 2020. "Credit Supply, Firms, and Earnings Inequality," MPRA Paper 100371, University Library of Munich, Germany.
    13. Stéphane Mussard & Françoise Seyte & Michel Terraza, 2006. "La décomposition de l’indicateur de Gini en sous-groupes : une revue de la littérature," Cahiers de recherche 06-11, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    14. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    15. Manuel Fernández & Gabriela Serrano, 2022. "New Perspectives on Inequality in Latin America," Documentos CEDE 20295, Universidad de los Andes, Facultad de Economía, CEDE.
    16. Stéphane Bonhomme & Kerstin Holzheu & Thibaut Lamadon & Elena Manresa & Magne Mogstad & Bradley Setzler, 2023. "How Much Should We Trust Estimates of Firm Effects and Worker Sorting?," Journal of Labor Economics, University of Chicago Press, vol. 41(2), pages 291-322.
    17. Jose Garcia-Louzao & Alessandro Ruggieri, 2023. "Labor Market Competition and Inequality," Bank of Lithuania Working Paper Series 117, Bank of Lithuania.
    18. Nicholas Rohde, 2016. "J-divergence measurements of economic inequality," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(3), pages 847-870, June.
    19. Casilda Lasso de la Vega & Ana Urrutia & Oscar Volij, 2013. "An axiomatic characterization of the Theil inequality ordering," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(3), pages 757-776, November.
    20. Babina, Tania & Ma, Wenting & Moser, Christian & Ouimet, Paige & Zarutskie, Rebecca, 2019. "Pay, Employment, and Dynamics of Young Firms," MPRA Paper 95382, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:wp-2018-157. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Siméon Rapin (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.