Earnings Differentials between Whites and Japanese: The Case of Brazil

Abstract

Recent studies of wage inequality show that there are many similarities between Brazil and other multiracial countries. The present research adds to this literature by examining wage differentials between white and Japanese-Brazilian males ages 18 to 64 in the state of Sao Paulo. Data are from the 0.8 percent sample of the 1980 Brazilian census. The effects of labor force experience, schooling, class of worker, location, and background characteristics on earnings are estimated separately for white and Japanese wage earners. Subsequently, the wage gap is decomposed into unexplained, composition, and interaction components. The data show that the average wage for Japanese-Brazilians is 61 percent higher than for whites and that 74 percent of this disparity is explained by differences in the means of the independent variables (composition). Compared to whites, Japanese-Brazilians are better educated and are more likely to be employers or self-employed. In addition, ambition, persistence, deferred gratification, and intergenerational mobility—characteristics associated with Asian attainment in the United States—provide a plausible explanation for the 22 percent of the earnings differential that is “unexplained.” This research suggests that the socioeconomic achievements of people of Japanese descent in Brazil surpass those of the white majority as has been the case in other multiracial countries.