Abstract
Abstract The Gini coefficient of labor earnings in Brazil fell by 20 percent between 1995 and 2012, from 0.5 to 0.4. The decline was even larger by other measures, with the 90-10 percentile ratio falling by almost 40 percent. Although the conventional explanation of falling returns to education did play a role, substantial reductions in the gender, race, and spatial wage gaps, conditional on human capital and institutional variables, explain the lion's share of the decline in earnings inequality. Lower male, white, urban, and southeast wage premia, alongside lower formal-informal wage gaps, account for 6.3 of the 10-Gini-point difference between 1995 and 2012. Although rising minimum wages contributed to the decline during 2003-2012, they had no such effect during 1995-2003.
Published Version
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