Inequality in Brazil: A Regional Perspective

35 Pages Posted: 1 Dec 2017

See all articles by Carlos Góes

Carlos Góes

International Monetary Fund (IMF)

Izabela Karpowicz

International Monetary Fund (IMF)

Date Written: October 2017

Abstract

In this study, we document the decline in income inequality and a convergence in consumption patterns in Brazilian states in a new database constructed from micro data from the national households' survey. We adjust the state-Gini coefficients for spatial price differences using information on households' rental prices available in the survey. In a panel regression framework, we find that labor income growth, formalization, and schooling contributed to the decline in inequality during 2004-14, but redistributive policies, such as Bolsa Familia, have also played a positive role. Going forward, it will be important to phase out untargeted subsidies, such as public spending on tertiary education, and contain growth of public sector wages, to improve budgetary efficiency and protect gains in equality.

Keywords: income inequality, redistribution policies, Brazil.

JEL Classification: C33, D31, D63, H52, H53, O15

Suggested Citation

Góes, Carlos and Karpowicz, Izabela, Inequality in Brazil: A Regional Perspective (October 2017). IMF Working Paper No. 17/225, Available at SSRN: https://ssrn.com/abstract=3079550

Carlos Góes (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Izabela Karpowicz

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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