Economic sector, demographic composition, educational attainment, and earnings in Brazil

Brazil experienced population ageing and improvement in educational attainment between 1980–2010. Proportion of workers in the formal economic sector increased between 2000–2010. Earnings decreased from 1980 to 1991 and increased in 2000. However, earnings in the formal economic sector decreased again in 2010. We estimate associations of individual- and area-level variables with individual earnings of male workers living in urban areas in Brazil. Ordinary least squares regressions estimate variations on earnings of male workers, using the 1980–2010 Demographic Censuses. Individual independent variables include age, education, economic sector, race/color, marital status, religion, and region of residence. Contextual independent variables consider demographic, educational, and economic sector compositions by areas of residence. Considering individual-level variables, older and better educated workers have higher earnings. Workers in the formal economic sector have higher earnings than in the informal sector. For area-level variables, higher proportions of people working in the formal economic sector have positive associations with earnings. Proportions of people in age-education groups have negative associations with earnings mostly among older workers. For models by economic sector, proportions in age-education groups have higher positive coefficients in the informal sector, compared to the formal sector. Transitions in demographic, educational, and economic sector compositions are correlated with earnings. These effects generate greater economic inequality in the informal sector than in the formal sector. Our main contribution is the estimation of models about associations of individual earnings with individual and area-level variables, which can be replicated for other countries.