OS EFEITOS DA EVOLUÇÃO DA PTF SOBRE A DINÂMICA DA DISTRIBUIÇÃO DE RENDA

Rogério César de Souza, Fernando Garcia and Jorge Pires

Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32nd Brazilian Economics Meeting] from ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics]

Abstract: This paper presents a new and alternative approach within the empirical literature dealing with inequality. It investigates to what extent are the dynamics of income inequality in economies affected by the changes in the components of Total Factor Productivity (TFP). The basic idea is that asset allocation and use, as well as production organization, directly influence personal and functional income distribution in countries. Starting with the stochastic frontier analysis, we apply the TFP decomposition suggested by Bauer (1990) and Kumbhakar (2000), for a sample of 38 countries, during the 1970-2000 period. Then, we estimate the direct effects of technical efficiency, allocative efficiency, technical progress, and economies of scale on income inequality of the countries.The results show that allocative, technical and scale efficiencies are positively correlated with Gini. This means that variables associated to the performance of capital channel income to this productivity factor. Technological progress, in turn, works on the entire economies, with direct effects on labor productivity and wages, resulting in a more equitable income distribution. This largely explains why countries such as Brazil, Chile and Mexico still suffer from high levels of income inequality, in spite of economic growth they have enjoyed in the last 30 years.

JEL-codes: C23 O15 O47 (search for similar items in EconPapers)
Date: 2004
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