Firms and the Decline in Earnings Inequality in Brazil

Jorge Alvarez, Felipe Benguria, Niklas Engbom and Christian Moser

No 2017/278, IMF Working Papers from International Monetary Fund

Abstract: We document a large decrease in earnings inequality in Brazil between 1996 and 2012. Using administrative linked employer-employee data, we fit high-dimensional worker and firm fixed effects models to understand the sources of this decrease. Firm effects account for 40 percent of the total decrease and worker effects for 29 percent. Changes in observable worker and firm characteristics contributed little to these trends. Instead, the decrease is primarily due to a compression of returns to these characteristics, particularly a declining firm productivity pay premium. Our results shed light on potential drivers of earnings inequality dynamics.

Keywords: WP; firm effect; firm size; mining firm; pay compression; Earnings Inequality; Linked Employer-Employee Data; Firm and Worker Heterogeneity; Productivity; firm pay policy; productivity shock; characteristics data; inequality trend; firm component; Wages; Income inequality; Aging (search for similar items in EconPapers)
Pages: 59
Date: 2017-12-14
References: Add references at CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=45479 (application/pdf)

Related works:
Journal Article: Firms and the Decline in Earnings Inequality in Brazil (2018)
Working Paper: Firms and the Decline in Earnings Inequality in Brazil (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2017/278

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().