Income Distribution in Post-1964 Brazil: New Results

Brazil is often cited as a developing country that has exemplified the trade-off between economic growth and equity. The basis for the claim was the rising inequality in the income distribution between the 1960 and 1970 censuses, combined with an increase in per capita income over the decade. Numerous scholars have analyzed the period, yet there is little or no agreement in the literature regarding either the causes or the extent of this apparent increase in inequality. Using a recently released sample of the 1970 demographic census, the empirical basis for the claim of deteriorating income distribution over the decade is examined here. Applying poverty lines defined for both 1960 and 1970 data sets, the correlates of income variance and poverty are analyzed. The results show that under most reasonable assumptions regarding data deficiencies and appropriate deflators, the fraction of the population in absolute poverty declined only slightly over the decade. Although the poorest households were found among the small farmers and sharecroppers in the rural areas in both 1960 and 1970, a large increase in the incidence of poverty in urban areas occurred over the decade.