Wage Differentials in Brazilian Manufacturing
This paper empirically investigates wage differentials for Brazilian manufacturing sector using micro-data analysis. We estimate cross-sectional wage equations including human capital variables, occupation, region, work-card possession, personal characteristics, among others, and using a more accurate estimation procedure proposed by Haisken-DeNew and Schmidt (1997). Compared to previous studies for Brazil, our results show a substantial drop in the non-explained wage dispersion. Our major finding is that wage determination seems to be a result of a mix of factors such as human capital, unmeasured abilities, efficiency wages, rent-sharing, and discrimination. However, contrasting with previous results which strongly support the importance of segmentation in wage determination, our results indicate that competitive explanations seem to play the most relevant role for understanding wage differentials.
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