Determinants of Income and Decomposition of Income Inequality by Gender, Ethnicity, and Residence in Pernambuco for the Years 2015 and 2019

Abstract

This study examines the factors affecting income and income inequality in Pernambuco, Brazil. Using data from the Continuous PNAD, the authors estimate the Mincerian equation for income and the Oaxaca-Blinder decomposition with unconditional quantile regression. The results show that education has the greatest impact on earnings, particularly for non-white and female individuals. Unexplained effects, such as discrimination, are the main drivers of income inequality between urban and rural areas. This study provides valuable insights into the distribution of income and highlights the importance of addressing education and discrimination in efforts to reduce inequality.