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How Much Does Talent Matter? Evidence from the Brazilian Formal Cultural Industry

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  • Ricardo da Silva Freguglia

    (Federal University of Juiz de Fora, Department of Economics)

  • Amir Borges Ferreira Neto

    (West Virginia University, Department of Economics)

Abstract

The goal of this paper is to evaluate how much does talent – the individual non-observed characteristics – matter to explain the wage differences between workers from the cultural industry and workers from other formal industries in Brazil. To do so we use the data from 2003 to 2008 of the Rais-Migra – MTE, which is a true panel of formal workers from Brazil, and use fixed effects estimators to capture the talent measure and the Blinder (1973) and Oaxaca (1973) decomposition to seek for evidences of wage difference. The results imply that the talent is important in the determination of wages especially when considering formal workers in the cultural activities, occupations and workers in both cultural activities and occupation. The Oaxaca decomposition provides evidence that when considering talent, each of the groups paid their workers more per se, proving that not only the talent matter, but also that the formal cultural environment in Brazil positively discriminates their workers.

Suggested Citation

  • Ricardo da Silva Freguglia & Amir Borges Ferreira Neto, 2017. "How Much Does Talent Matter? Evidence from the Brazilian Formal Cultural Industry," Working Papers 17-07, Department of Economics, West Virginia University.
    • Handle: RePEc:wvu:wpaper:17-07
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    File URL: http://busecon.wvu.edu/phd_economics/pdf/17-07.pdf
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    More about this item

    Keywords

    Wage Differentials; Cultural Industry; Talent; Fixed Effects; Brazil;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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