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Further Evidence on Wage and Productivity Differentials in Brazil


  • Marcelo Eduardo A. da Silva


  • Alexandre Rands Barros



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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  • Marcelo Eduardo A. da Silva & Alexandre Rands Barros, 2003. "Further Evidence on Wage and Productivity Differentials in Brazil," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31th Brazilian Economics Meeting] f37, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  • Handle: RePEc:anp:en2003:f37

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    References listed on IDEAS

    1. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 255-283.
    2. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    3. Alan B. Krueger & Mikael Lindahl, 1998. "Education for Growth in Sweden and the World," Working Papers 790, Princeton University, Department of Economics, Industrial Relations Section..
    4. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    5. 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.
    6. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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