Cyclical variations of earnings inequality in Brazil

Eliana Cardoso ()

Brazilian Journal of Political Economy, 1993, vol. 13, issue 4, 613-625

Abstract: This paper shows that income distribution can change dramatically during thebusiness cycle. This finding contrasts with the widespread belief that income distributionchanges slowly in the absence of wars and revolutions. Macroeconomics explains in goodmeasure short-run variations in income distribution: inequality varies cyclically, and it increaseswith inflation and unemployment. Furthermore, at least in Brazil, the minimum wagelegislation does not contribute to a better income distribution. There is also evidence thatpopulist policies which lead to real appreciation cannot be justified as supporting the poor.Thus, the best way to help the poor is demonstrably not through the manipulation of pricesand wages, but probably through macro stability and a transparent tax-transfer system. JEL Classification: I32; O15.

Keywords: Income distribution; inequality; minimum wage; business cycles (search for similar items in EconPapers)
Date: 1993
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