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Non-employment duration and subsequent wage losses in the Brazilian labour market


  • Hilton Martins de Brito Ramalho
  • Ignácio Tavares de Araújo Júnior
  • Paulo Aguiar do Monte


This paper analyses the relationship between unemployment and its respective duration on subsequent salary. Despite of being a topic of intense debate in the labour market literature, there is little empirical evidence to support this perspective in the Brazilian labour market. Drawing on data from the Monthly Employment Survey (2008, 2009) and following the methodology proposed by Tunali (1986), plus an analysis of wage differential, the findings go in the same direction of earlier studies (e.g. Keltzer, 1998; Burda and Mertens, 2001; Arulampalam 2001; Arranz et al., 2010) by highlighting that unemployment duration generates a cost to employees represented in a subsequent wage loss. In other words, it seems that workers who have recently experienced unemployment spell have disadvantages in terms of wages compared to those who remained employed throughout the period under inquiry.

Suggested Citation

  • Hilton Martins de Brito Ramalho & Ignácio Tavares de Araújo Júnior & Paulo Aguiar do Monte, 2011. "Non-employment duration and subsequent wage losses in the Brazilian labour market," Série Textos para Discussão (Working Papers) 2, Programa de Pós-Graduação em Economia - PPGE, Universidade Federal da Paraíba.
  • Handle: RePEc:ppg:ppgewp:2

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    References listed on IDEAS

    1. Jaime Saavedra-Chanduví & José R. Molinas & Ricardo Paes de Barros & Francisco H. G. Ferreira, 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 361.
    2. Roland Bénabou & Jean Tirole, 2006. "Belief in a Just World and Redistributive Politics," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 699-746.
    3. Alberto Alesina & George-Marios Angeletos, 2005. "Fairness and Redistribution," American Economic Review, American Economic Association, vol. 95(4), pages 960-980, September.
    4. Alesina, Alberto & La Ferrara, Eliana, 2005. "Preferences for redistribution in the land of opportunities," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 897-931, June.
    5. Birchenall, Javier A., 2001. "Income distribution, human capital and economic growth in Colombia," Journal of Development Economics, Elsevier, vol. 66(1), pages 271-287, October.
    6. Joan Esteban & Laurence Kranich, "undated". "Redistributive Taxation With Endogenous Sentiments," Working Papers 33-02 Classification-JEL , Instituto de Estudios Fiscales.
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    More about this item


    Unemployment; Wages; Bivariate Probit;

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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