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Education or Inflation? The Roles of Structural Factors and Macroeconomic Instability in Explaining Brazilian Inequality in the 1980s

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  • Francisco H.G. Ferreira
  • Julie Litchfield

Abstract

This paper investigates possible explanations for the increases in inequality observed in Brazil during the 1980s. While the static decompositions of inequality by household characteristics reveal that education and race of the household head, as well as geographic location, can account for a substantial proportion of inequality levels, a dynamic decomposition suggests that changes in inequality are not explained by income or allocation effects across these groupings, but by pure within-group inequality effects. The analysis then turns to the role of macro-economic instability, and finds some significant correlation and regression coefficients which suggest a link between inflation and inequality, while poverty appears to be more strongly driven by real wages, growth and employment.

Suggested Citation

  • Francisco H.G. Ferreira & Julie Litchfield, 1998. "Education or Inflation? The Roles of Structural Factors and Macroeconomic Instability in Explaining Brazilian Inequality in the 1980s," STICERD - Distributional Analysis Research Programme Papers 41, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    • Handle: RePEc:cep:stidar:41
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    File URL: https://sticerd.lse.ac.uk/dps/darp/darp41.pdf
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    Cited by:

    1. Bhandari, Bornali, 2007. "Effect of Inward Foreign Direct Investment on Income Inequality in Transition Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 888-928.
    2. Kanbur, Ravi & Lustig, Nora, 1999. "Why is Inequality Back on the Agenda?," Working Papers 127690, Cornell University, Department of Applied Economics and Management.
    3. Francisco H. G. Ferreira, 1999. "Economic transition and the distributions of income and wealth," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 377-410, July.

    More about this item

    Keywords

    Brazil; inequality decomposition; poverty; inflation and unemployment;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy
    • D3 - Microeconomics - - Distribution

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