Inequality in Brazil: A Regional Perspective

Carlos Góes and Izabela Karpowicz

No 2017/225, IMF Working Papers from International Monetary Fund

Abstract: In this study, we document the decline in income inequality and a convergence in consumption patterns in Brazilian states in a new database constructed from micro data from the national households’ survey. We adjust the state-Gini coefficients for spatial price differences using information on households’ rental prices available in the survey. In a panel regression framework, we find that labor income growth, formalization, and schooling contributed to the decline in inequality during 2004-14, but redistributive policies, such as Bolsa Família, have also played a positive role. Going forward, it will be important to phase out untargeted subsidies, such as public spending on tertiary education, and contain growth of public sector wages, to improve budgetary efficiency and protect gains in equality.

Keywords: WP; minimum wage; income inequality; redistribution policies; Brazil; wage growth; public sector wage Premia; IMF staff calculation; labor income; quartile income; household income; income inequality in Brazil; income convergence; state Gini coefficient; income growth; inequality in Brazil; growth in the public sector; Income; Income distribution; Wages; Global (search for similar items in EconPapers)
Pages: 34
Date: 2017-10-31
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2017/225

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