This text was written with two objectives: the first is to document the evolution ofinequality during the last three decades and the second is to decompose the notablefall in inequality in the last three years.The text shows that 2004 was the year with lowest inequality in the thirty yearsbetween 1976 and 2004. This result holds true for inequality according to Theil T,Gini, the 10/40 ratio and the 20/20 ratio. In addition, 2004 presents Lorenz dominanceover all years except 1984 and 1981. Due to the exchange rate debacle of1999, 2004 does not show first order dominance over any year in the period from1995 to 2004, during which level comparisons are trustworthy. For this same period,2004 shows second order dominance over 2003 and no other year.To achieve the second objective, the methodology used is Gini decompositionby factor shares. The results are that income transfer programs such as Bolsa Famíliaare responsible for close to ¼ of the fall of inequality from 1995 to 2004. The other¾ are due to a reduction in the concentration of labor income.
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Paper provided by Instituto de Pesquisa Econômica Aplicada - IPEA in its series Discussion Papers with number
1166.