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Income Inequality Reduction in Brazil: A Pseudo-panel Approach in the Search of its Determinants

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  • Ana Maria Barufi

Abstract

Ever since the late 1990`s personal income inequality has shown a steady decrease in Brazil. Most of the investigations of this phenomenon are restricted to the analysis of aggregated information along the years. This paper tries to identify the main factors for it, using microdata of the National Household Sample Survey (PNAD) for the period 1995-2009. The years have been chosen in order to allow an evaluation of different economic and political contexts and a pseudo-panel based on age-state cohorts is built to compare the effect of transfers (social programs and retirement), wage increases and regional specific factors in the decrease of income inequality. The pseudo-panel is essential to control for unobservable characteristics of the head of the household and is an option for the lack of true panel data information in Brazil. In spite of the overall improvement of households’ lives in the country, regional inequalities persist and remain to be assessed in the following decades. However, it is noticeable the essential role of social transfers to reduce poverty (at least in the short-run) and induce the inequality reduction.

Suggested Citation

  • Ana Maria Barufi, 2012. "Income Inequality Reduction in Brazil: A Pseudo-panel Approach in the Search of its Determinants," TD NEREUS 11-2012, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    • Handle: RePEc:ris:nereus:2012_011
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    References listed on IDEAS

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    Cited by:

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    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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