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Determinants of unfair inequality in Brazil, 1995 and 2009

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Determinants of unfair inequality in Brazil, 1995 and 2009

Author: Annegues, Ana Claudia - Figueiredo, Erik Alencar de - Souza, Wallace Patrick Santos de Farias Physical Description: páginas. 165-17 Date: April 2015 ECLAC symbol: LC/G.2636-P


This article analyses the trend of unfair inequality in Brazil (1995-2009) using a nonparametric approach to estimate the income function. The entropy metrics introduced by Li, Maasoumi and Racine (2009) are used to quantify income differences separately for each effort variable. A Gini coefficient of unfair inequality is calculated, based on the fitted values of the non-parametric estimation; and the robustness of the estimations, including circumstantial variables, is analysed. The trend of the entropies demonstrated a reduction in the income differential caused by education. The variables “hours worked” and “labour-market status” contribute significantly to explaining wage differences imputed to individual effort; but the migratory variable had little explanatory power. Lastly, the robustness analysis demonstrated the plausibility of the results obtained at each stage of the empirical work.