The Evolution of Income Distribution in Brazil in the Agricultural and the Non-agricultural Sectors

Abstract

The paper analyzes the characteristics and evolution of income distribution in the Brazilian agricultural sector, comparing it with the overall distribution or with the non-agricultural sector, considering two dimensions: the per capita household income and the income of occupied persons. The main data source is the National Household Sample Survey (PNAD). In order to fulfill this purpose, the per capita household income was divided into nine components (for Brazil and considering only the agricultural households) to evaluate their contributions to the decrease in inequality. In the second part, the paper analyzes the characteristics of occupied persons and the determining factors of their income, always comparing the agricultural and non-agricultural sectors. The estimated effects were analyzed over the period 1992-2012, adjusting one earnings equation for each year. In both cases (per capita household income and earnings of occupied persons), the agricultural sector showed a markedly different behavior. Regarding the per capita household income, though from 2001 to 2009 the rate of reduction in inequality among agricultural households is similar to the one observed in Brazil as a whole, the determinants associated with this reduction are clearly different in the agricultural sector. Concerning the income of occupied persons, the reduction in inequality is less intense and more irregular in the agricultural sector. The various factors that determine the income of occupied persons also presented distinct behaviors for the agricultural and non-agricultural sectors.

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