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The Structure of Worker Compensation in Brazil, with a Comparison to France and the United States

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  • Naércio Aquino Menezes Filho
  • Marc-Andreas Muendler
  • Garey Ramey

Abstract

We employ a comprehensive matched employer-employee data set for Brazil to analyze wage determinants and compare results to Abowd, Kramarz, Margolis and Troske (2001) for French and U.S. manufacturing. Returns to education and experience in Brazilian manufacturing exceed those of the other countries, while occupation differentials are similar. The gender differential in Brazilian and U.S. manufacturing coincides, and is considerably smaller than in France. Estimates are unaffected by selectivity of Brazilian workers into formal employment. The links between firm performance and wage components in Brazil resemble those of France. Worker characteristics have comparable explanatory power for manufacturing wage variability in the three countries but establishment-fixed effects explain relatively less of the Brazilian wage variation. Despite the inclusion of establishment effects, regressors predict at most sixty percent of wage variability in any Brazilian sector, suggesting that explanations for earnings variability ought to focus on worker characteristics, not establishment wage policies.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1643.

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Date of creation: 2006
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Handle: RePEc:ces:ceswps:_1643

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Keywords: wage structure; wage inequality; matched employer-employee data; formal and informal employment; selectivity; Brazil;

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  1. Naércio Aquino Menezes-Filho & Marc-Andreas Muendler, 2011. "Labor Reallocation in Response to Trade Reform," NBER Working Papers 17372, National Bureau of Economic Research, Inc.
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  3. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710 Elsevier.
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