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Further Evidence on Wage and Productivity Differentials in Brazil

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  • Alexandre Rands

    ()
    (Datamétrica Consultoria, Pesquisa e Telemarketing)

  • Marcelo Eduardo A. da Silva

    (Datamétrica Consultoria, Pesquisa e Telemarketing)

Abstract

This paper discusses the relationship between the elasticities of wages and productivity with respect to human capital. The goal is to search if there is a distortion on the expected relationship between these two variables, given market forces and a selfish behavior by agents, as it is found in some Europeans countries. A general equilibrium, overlapping generation model that can capture the relationship between these two elasticities is presented. Two equations that emerge from this model are estimated, using data from RAIS and IBGE Pesquisa Industrial Annual for 2000. The results indicate that local labor market attenuates income inequality, transferring income from more qualified to less qualified workers, similarly to what happens in European labor markets.

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File Function: Revised version, 2003.
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Bibliographic Info

Paper provided by Datamétrica Consultoria Econômica in its series Working Papers with number 34.

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Length: 22 pages
Date of creation: 2003
Date of revision: 2003
Handle: RePEc:dtm:wpaper:34

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Keywords: Productivity; wages; general equilibrium;

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  1. Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank.
  2. Galor, Oded & Zeira, Joseph, 1988. "Income Distribution and Macroeconomics," MPRA Paper 51644, University Library of Munich, Germany, revised 01 Sep 1989.
  3. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
  4. Alan Krueger & Mikael Lindahl, 1998. "Education for Growth in Sweden and the World," Working Papers 790, Princeton University, Department of Economics, Industrial Relations Section..
  5. Akerlof, George A & Yellen, Janet L, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 255-83, May.
  6. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
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