Earnings In Brazil Research Articles

Assessing earnings inequalities by gender and race in the cultural sector in Brazil

This study aimed to investigate gender and racial disparities in earnings in Brazil’s cultural sector. Using microdata from 2019 and 2020, earnings equations were estimated, and the Firpo, Fortin, and Lemieux decomposition method was applied by quantile, considering two definitions of the cultural sector: broad and narrow, the latter excluding manufacturing and commercial activities. The findings highlight the presence of gender and racial inequalities, with racial disparities being more significant. In the broad cultural sector, both white and black women have higher average education levels than men but tend to work in lower-paying occupations. The explained effect, largely driven by the lower education levels of black workers, plays a crucial role in determining the earnings gap from a racial perspective. When focusing on culture-related activities, women possess more favourable characteristics for higher pay compared to men, except for the unexplained effect. Without this effect, women would earn more than men across all quantiles. White women in the narrower cultural sector appear to have broken the glass ceiling, but a sticky floor effect is observed for them. However, black women have yet to overcome the glass ceiling barriers in the cultural sector.

Differential fertility, school enrollment, and development

This paper develops a model wherein parents choose the number of children, enroll some children in school at indivisible education costs, and receive supplemental earnings from uneducated children. The model accounts for the positive relationship between enrollment ratios and parental earnings and the N-shaped relationship between fertility and parental earnings in Brazil and Indonesia. When children’s living costs are high (low) relative to education costs and children’s earnings, fertility increases (decreases) with parental earnings due to a dominant income (substitution) effect. A decline in the ratio of child earnings to parental earnings or a rise in education subsidy rates can increase enrollment ratios and decrease fertility. Under progressive income taxes and favorable education subsidies for poor families, educated parents’ fertility could be higher than that of illiterate parents’ when incomes are low. However, the relationship will be reversed partially because of the rising education subsidy.

Intergenerational mobility in education and occupation and the effect of schooling on youth’s earnings in Brazil

This study uses data from the International Labor Organization’s 2013 school-to-work transition survey (SWTS) to measure intergenerational educational and occupational mobility in Brazil. The SWTS database contains information on youths from 15 to 29 years old as well as on family’s socioeconomic characteristics, both current and retrospective. This data set permits the measurement of intergenerational mobility. The results obtained show great intergenerational educational mobility, especially when parents had lower levels of education, and slightly less occupational mobility. To analyze the returns to education, earnings equations were estimated using the Heckman selection model. The education of youths and their parents had a great impact on youths’ earnings, mainly on females. Young women with higher education more than double their earnings compared to those without high school.

AGGREGATE EARNINGS AND RETURNS IN BRAZIL

We used the method employed in Kothari, Lewellen and Warner (2006) to show the relationship between aggregate earnings and market returns in Brazil in the period from 1995 to 2017. Considering the findings found by Kothari, Lewellen and Warnet (2006), our results indicate that the theory of Bernard and Thomas (1990) is more consistent with the US market than with the Brazilian market, signaling that the aggregate post-earnings announcement drift tends to be larger in markets with higher earnings persistence, like Brazil. Our findings also indicate that the relationship between aggregate returns and earnings in Brazil tends to be positive for the current period and the next two quarters, corroborating the Sadka and Sadka (2009) study. Considering that the predictability of earnings in the US market is higher than that in Brazil, our results also support the argument by He and Hu (2014) that the relationship between aggregate earnings and returns is linked to each country’s level of disclosure. However, new evidences reveal the influence of high interest rates on financial market results, suggesting that expectations of increased interest rates tend to reduce aggregate current returns in Brazil due to the possible migration of capital to lower risk, given the attractiveness of their returns in an environment of high inflation.

Earnings informativeness in the Brazilian market: the influence of dividends and financial constraints

ABSTRACT This study addresses the informativeness of accounting earnings in Brazil by analysing the impact of distributed dividends and the existence of financial constraints. Panel data regression with fixed effects and quantile regression estimated that the dividend informativeness in Brazil and the presence of financial constraints affect earnings informativeness, even when the different forms of earnings distribution in Brazil are considered. The main contribution of the study is to provide further evidence on the Brazilian market that adopts a rare mandatory minimum dividend rule, and moreover, defines the distribution of earnings under different tax regime categories.

Labor Market Experience and Falling Earnings Inequality in Brazil: 1995–2012

Abstract The Gini coefficient of labor earnings in Brazil fell by nearly a fifth between 1995 and 2012, from 0.50 to 0.41. The decline in other measures of earnings inequality was even larger, with the 90-10 percentile ratio falling by almost 40 percent. Applying micro-econometric decomposition techniques, this study parses out the proximate determinants of this substantial reduction in earnings inequality. Although a falling education premium did play a role, in line with received wisdom, this study finds that a reduction in the returns to labor market experience was a much more important factor driving lower wage disparities. It accounted for 53 percent of the observed decline in the Gini index during the period. Reductions in horizontal inequalities – the gender, race, regional and urban-rural wage gaps, conditional on human capital and institutional variables – also contributed. Two main factors operated against the decline: a greater disparity in wage premia to different sectors of economic activity, and the “paradox of progress”: the mechanical inequality-increasing effect of a more educated labor force when returns to education are convex.

Estimating the returns to education using a parametric control function approach: evidences for a developing country

This paper investigates the causal effect of education on earnings in Brazil by employing a new method proposed by Klein and Vella (2010) that obtains identification on the presence of conditional heteroskedasticity. In contrast to traditionally used IV methods, this approach yields unbiased estimates in the absence of instruments. Results indicate that the average return to education in Brazil was relatively stable at around 14% from 1995 to 2003, declined afterwards reaching 10.7% in 2014, but has bounced back to 11.8% after the economic crisis in 2015. The results suggest that the OLS estimations are downward biased and we interpret this as a sign of under-education premiums that are likely to occur in environments where the more talented ones are dropped from school and moved into the labor market earlier in life.

Earnings Inequality and the Minimum Wage: Evidence from Brazil

We show that a rise in the minimum wage accounts for a large decline in earnings inequality in Brazil since 1994. To this end, we combine rich administrative and survey data with an equilibrium model of the Brazilian labor market. Our results imply that the minimum wage has far-reaching spillover effects on wages higher up in the distribution, accounting for one-third of the 25.9 log point fall in the variance of log earnings in Brazil since 1994. At the same time, the minimum wage’s effects on employment and output are muted by reallocation of workers toward more productive firms. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Quality of food choices of Brazilian adolescents according to individual earnings.

To evaluate the quality of food choices according to adolescent individual earnings in Brazil. Adolescents were classified according to their individual earnings as having or not having spending power for their own expenses. Food records from two non-consecutive days of the Brazilian National Dietary Survey (NDS 2008-2009) were used to estimate food intake. Quality of food choices was based on two approaches: (i) the NOVA classification, which classifies processed and ultra-processed foods and drinks as unhealthy food groups; and (ii) traditional classification, with beans, milk, fruits and vegetables as healthy food groups, and soft drinks, sweets, snacks and crackers classified as unhealthy. We compared mean food intake (g/kJ or ml/kJ) according to per capita household income (tertiles) and adolescent individual earnings, with adolescent earnings adjusted for household income, using multiple linear regression. Brazilian households (n 13 569). Adolescents aged 14-18 years (n 3673). Males without individual earnings had higher per capita household income than those with individual earnings. Household income was associated with all three food groups of the NOVA classification and seven of the eight groups of the traditional classification. However, only beans and snacks were consumed in significantly greater quantities by adolescents with individual earnings compared with those without earnings. Adolescent individual earnings were not the main driver of food choices; however, per capita household income was associated with food choices. The consumption of both healthy and unhealthy items increased with increasing household income.

Educational mismatch and labor earnings in Brazil

PurposeThe purpose of this paper is to investigate the relationship between educational mismatch and labor earnings in Brazil, taking into account individual fixed effects.Design/methodology/approachThe empirical analysis employs longitudinal data and information provided by job analysts about the schooling required for each occupation. The latter of which is used to classify workers as undereducated, overeducated, or adequately matched. Estimates include individual fixed effects to control for time-invariant unobserved heterogeneity.FindingsEvidence indicates that one more year of overeducation increases labor earnings, but only half as strong as one more year of required schooling. The estimated effects on years of undereducation are negative, but undereducated workers earn more than adequately matched workers with the same level of education. Although, in particular, the incidence of undereducation in Brazil is much higher than reported for developed countries, the impact of over- and undereducation does not differ.Research limitations/implicationsThe fixed effects approach only controls for unobservable factors that are time-invariant. Also, much lower impacts using fixed effects may be due in part to attenuation bias as a consequence of measurement errors.Originality/valueThis study contributes to the scarce literature on the consequences of overeducation and undereducation for labor earnings in developing countries, providing estimates that take into account individual fixed effects.

Erratum to: Demographic changes, educational improvements, and earnings in Brazil and Mexico

Erratum to: Demographic changes, educational improvements, and earnings in Brazil and Mexico

The Influence of Internal Migration on Male Earnings in Brazil, 197002000

This paper deals with the impact of internal migration flows on the earnings of male workers. The availability of jobs and income levels in sending and receiving areas also influence internal population flows. Thus, migration is an endogenous variable that cannot be simply introduced as an exogenous variable when estimating labor outcomes. A methodological approach is developed to introduce migration into our models, dealing with the issue of reverse causality between migration and earnings. We implement this strategy using the 1970–2000 Brazilian Demographic Censuses. Our findings reflect our initial hypothesis, indicating that migration flows have a negative impact on male earnings, when considering cohort size as a factor. A ten percent increase in migration rates would have reduced the wages of competing workers by up to three percent in 2000. These methodological strategies can be applied to other countries that have similar available migration data.

Corporate Governance Characteristics as a Stimulus to Tax Management

This article aimed to investigate whether corporate governance uses tax management to increase companies' performance. The objective was checking whether corporate governance characteristics, such as remuneration paid to the executive board, segregation between Chairman and CEO, and the independence and composition of the Board of Directors, influence tax management in Brazilian companies. At the same time, it aimed to identify whether the preceding tax management is reflected on the subsequent tax management. To do this, a sample of 355 Brazilian companies listed on the BM&FBOVESPA between 2008 and 2014 was used, in order to find out whether their corporate governance characteristics influenced tax management, something identified by calculating ETR, CashETR, and BTD. As a result, it was found (i) that the remuneration paid to executives may be regarded as a characteristic influencing tax management in Brazilian firms, and (ii) that the preceding tax management influences the future tax management. In addition, it was found that Brazilian companies do not rule out tax management benefits, since the average effective rate in the sample under analysis was 25%, and it is statistically lower than the nominal rate of taxes on earnings in Brazil, which is 34%.

The influence of internal migration on male earnings in Brazil, 1970–2000

This paper deals with the impact of internal migration flows on the earnings of male workers. The availability of jobs and income levels in sending and receiving areas also influences internal population flows. Thus, migration is an endogenous variable that cannot be simply introduced as an exogenous variable when estimating labour outcomes. A methodological approach is developed to introduce migration into our models, dealing with the issue of reverse causality between migration and earnings. We implement this strategy using the 1970–2000 Brazilian Demographic Censuses. Our findings reflect our initial hypothesis, indicating that migration flows have a negative impact on male earnings, when considering cohort size as a factor. A 10% increase in migration rates would have reduced the wages of competing workers by up to 3% in 2000. These methodological strategies can be applied to other countries that have similar available migration data. Public policies should take into account the levels of in- and out-migration flows in specific locations, in order to stimulate economic development in these areas.

Demographic changes, educational improvements, and earnings in Brazil and Mexico

This paper estimates the association of demographic and educational changes with earnings and returns to schooling of male workers in Brazil and Mexico. Our analysis takes into account demographic, educational, and economic variations within each country over time, using Demographic Censuses microdata from Brazil and Mexico. Results suggest that demographic and educational transitions are correlated with earnings and returns to education. Proportions of people in age-education groups tend to have negative associations with aggregated earnings. Workers with secondary education completed experience negative effects on their earnings by having lower education than university graduates (education effect) and by representing a bigger share of the population than males with university education completed (cohort size effect). The negative correlations of cohort size have been decreasing in magnitude over time. We also find that the concentration of skilled labor in specific locations has positive associations with individual earnings and that they are greater than those observed in more developed countries. Moreover, in Brazil and Mexico, these effects are observed throughout the income distribution, contrary to what is observed in studies for the United States. JEL classification codes: I2 (Education economics), J1 (Demographic economics)

A More Level Playing Field? Explaining the Decline in Earnings Inequality in Brazil, 1995-2012

The Gini coefficient of labour earnings in Brazil fell by 20% 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%. Although the conventional explanation of falling returns to education did play a role, a RIF regression-based decomposition analysis suggests that 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 ten Gini points difference between 1995 and 2012. Although rising minimum wages contributed to the decline during 2004-2012, they had no such effect during 1995-2002.

Effects of the Age-Education Structure of Female Workers on Male Earnings in Brazil.

The main concern of this study is the impact that an increase in female participation within the labor force has on the earnings of males in Brazil. Previous research considered these transitions for male workers, but did not include female workers when estimating various effects on earnings. The 1970, 1980, 1991, and 2000 Brazilian Demographic Censuses were used for this analysis. Results suggest a significant negative impact on male earnings in 1970 as a result of the share of female workers. This effect has been decreasing over time, as the coefficients from more recent years are positive. Changes in age and educational composition make a substantial difference on the estimation of male earnings in Brazil. The method developed in this study is not infallible, but it improves previous estimates by including the relationship among compositional changes, female labor force participation, and earnings, thus going beyond the direct impact of age and education.

Loss recognition timeliness in Brazilian banks: The influence of state ownership

This paper investigates the effect of state ownership on the conditional conservatism of financial reports of Brazilian banks. State controlled banks in Brazil face additional monitoring from government authorities and managers risk litigation as individuals with potential effects on their personal wealth. Thus we hypothesize that state ownership would have a positive marginal effect on conditional conservatism in this institutional environment. Using a times series conditional conservatism model our results confirm our expectations and show that state ownership has a positive effect on the conditional conservatism of earnings in Brazil. Using a logit model we also corroborate this effect after controlling for the effect of unconditional conservatism and earnings smoothing.

The effect of leverage on earnings management in Brazil

The main goal of this paper is to analyze the relation between the leverage ratio and the managers’ decision to manage earnings in Brazil. Using abnormal accruals as a proxy for earnings management we design a linear regression model to capture the relation between these two variables. We use three models of discretionary accruals as proxy for earnings management. First one was the Jones model. Proposed by Jones (1991), the second model was the Modified Jones model, proposed by Dechow, Sloan and Sweeney (1995). The third one was the KS model, proposed by Kang and Sivaramakrishnan (1995), which uses an instrumental variable approach to correct for endogenous variables. Using a linear regression method with observation from 1994 to 2010 firms all BMF&Bovespa listed firms we try to model the relationship between earnings management and the leverage ratio. We also control our model for the cost of capital and the natural logarithm of total assets. We used the assets natural logarithm to control for firm size and the firm cost of debt to try to remove precious known endogeneity in the proposed model. Our final results show no relations between the leverage ratio and earnings management. These results contribute to the literature that examines the effect of opportunistic behavior on earnings management that examines the leverage/earnings management relation. Moreover the main findings suggest that there is a beneficial consequence of debt because the increased debt might reduce manager’s discretionary spending, and in turn, reduces accrual earnings management.

Escolaridade dos pais, desempenho no mercado de trabalho e desigualdade de rendimentos

O nivel de educacao dos pais esta bastante associado ao desempenho dos filhos no mercado de trabalho no Brasil. Com isso, a estrutura educacional da familia pode desempenhar um papel importante na determinacao da elevada disparidade de rendimentos observada. Utilizando dados do suplemento sobre mobilidade social da PNAD (Pesquisa Nacional por Amostra de Domicilios) de 1996, este artigo analisa a relacao entre a distribuicao de rendimentos do trabalho no Brasil e a escolaridade dos pais dos trabalhadores. De acordo com os resultados, a estrutura educacional da familia, atraves tanto da sua influencia sobre o nivel educacional dos trabalhadores como, em menor escala, sobre os retornos para a escolaridade, parece um importante determinante da desigualdade nos rendimentos do trabalho.