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Wage Differentials in Brazilian Manufacturing


  • Jorge Saba Arbache



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.

Suggested Citation

  • Jorge Saba Arbache, 1997. "Wage Differentials in Brazilian Manufacturing," Studies in Economics 9705, School of Economics, University of Kent.
  • Handle: RePEc:ukc:ukcedp:9705

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    References listed on IDEAS

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    Cited by:

    1. Arbache, Jorge Saba & Carneiro, Francisco Galrao, 1999. "Unions and Interindustry Wage Differentials," World Development, Elsevier, vol. 27(10), pages 1875-1883, October.
    2. Jorge Saba Arbache, 1998. "The Impact of Unions on Wages in Brazilian Manufacturing," Studies in Economics 9805, School of Economics, University of Kent.

    More about this item


    Wage differentials; wage determination; manufacturing; Brazil;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing


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