Earnings Inequality and the Minimum Wage: Evidence from Brazil

Engbom, Niklas; Moser, Christian

doi:10.2139/ssrn.3181965

Cited by 30 publications

(36 citation statements)

References 55 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Most early papers on falling inequality in Brazil (and elsewhere in Latin America) tend to attribute most of the decline to this falling skill premium effect. 4 More recently, other authors have attributed much-even most-of the decline to the direct and indirect effects of a rising real minimum wage policy (Alvarez et al, 2016, andEngbom andMoser, 2016).…”

mentioning

confidence: 99%

Ageing Poorly?: Accounting for the Decline in Earnings Inequality in Brazil, 1995-2012

Ferreira

Firpo

Messina

2017

View full text Add to dashboard Cite

work is licensed under a Creative Commons IGO 3.0 AttributionNonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose, as provided below. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Following a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail.Note that link provided above includes additional terms and conditions of the license. The Gini coefficient of labor earnings in Brazil fell by nearly a fifth between 1995 and 2012, from 0.50 to 0.41. The decline in earnings inequality was even larger by other measures, with the 90-10 percentile ratio falling by almost 40 percent. Although the conventional explanation of a falling education premium did play a role, an RIF regression-based decomposition analysis suggests that the decline in returns to potential experience was the main factor behind lower wage disparities during the period. Substantial reductions in the gender, race, informality and urbanrural wage gaps, conditional on human capital and institutional variables, also contributed to the decline. Although rising minimum wages were equalizing during 2003-2012, they had the opposite effects during 1995-2003, because of declining compliance. Over the entire period, the direct effect of minimum wages on inequality was muted. JEL classifications: D31, J31

show abstract

mentioning

confidence: 99%

Ageing Poorly?: Accounting for the Decline in Earnings Inequality in Brazil, 1995-2012

Ferreira

Firpo

Messina

2017

View full text Add to dashboard Cite

show abstract

“…Similarly, changes in Brazil's labor market institutions, such as the level and coverage of minimum wages, and the degree of enforcement of formal employment contracts, may have played a role. Indeed, in a recent paper using administrative matched employer-employee data from Brazil's formal sector (the RAIS dataset), Engbom and Moser (2016) claim that the rise in the real value of the minimum wage, including indirect spillover effects along the distribution, may account for as much as 70 percent of the reduction in the variance of log earnings in essentially the same period we study here (1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012).…”

Section: Falling Inequality In Brazil and Its Five Potential Driversmentioning

confidence: 99%

“…About 40% of 25 The latter is marginally significant but positive, hence unequalizing. 26 See Engbom and Moser (2016) for a discussion of possible mechanisms for these minimum wage spillovers, related to a dilution of firms' monopsony power in a search-theoretic setting where matching occurs with friction.…”

mentioning

confidence: 99%

Ageing Poorly? Accounting for the decline in earnings inequality in Brazil, 1995–2012

Ferreira

Firpo

Messina

2017

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Terms of use: Documents in JEL Classification:D31, J31

show abstract

“…Existing models such as Burdett and Coles [2003] and Shi [2009] are consistent with the fact that lowwage jobs have higher turnover. 4 However, these models assume identical layoff rates across including Engbom and Moser [2016], who argue that minimum wages mitigated a sizable fraction of Brazil's wage inequality. Across other countries, Blau and Kahn [1996] and Koeniger et al [2004], among others, study correlations between labor market protection and wage inequality.…”

Section: Introductionmentioning

confidence: 99%

Wage Inequality and Job Stability

Araujo

2017

Preprint

View full text Add to dashboard Cite

How much wage inequality in Brazil is caused by firing costs? To answer this question, I develop and estimate a general equilibrium search and matching model with heterogeneous layoff rates among firms. Using matched employer-employee data from Brazil, I estimate the model, and I find that it replicates the observed residual wage inequality in the data. I simulate a counterfactual removal of existing firing costs, and I find that residual wage inequality drops by 26% as measured by wage variance and by 4.4% as measured by the p95-p5 ratio among 25-to 55-year-old males working in the private sector with at most a high school degree. Worker welfare among this subgroup of households increases by almost 1% in response to the abolishment of firing costs. * I especially thank Hugo Hopenhayn for his guidance and advice. I also thank Pierre

show abstract

Earnings Inequality and the Minimum Wage: Evidence from Brazil

Cited by 30 publications

References 55 publications

Ageing Poorly?: Accounting for the Decline in Earnings Inequality in Brazil, 1995-2012

Ageing Poorly?: Accounting for the Decline in Earnings Inequality in Brazil, 1995-2012

Ageing Poorly? Accounting for the decline in earnings inequality in Brazil, 1995–2012

Wage Inequality and Job Stability

Contact Info

Product

Resources

About