The public-private wage gap and per capita income inequality in Brazil
Keywords:
income inequality, wage inequality, public sector Workers, Wage differentials, labor market segmentation.Abstract
We estimate the contribution of the wage differential between workers with the same attributes in the public and private sectors to the household per capita income inequality in Brazil. The estimate is based on counterfactual simulations and the contribution to inequality on a factor decomposition of the Gini coefficient. Data comes from the Brazilian National Household Survey PNAD 2009. The differential corresponds approximately to 17% of the total wages bill, is regressive and highly concentrated. However, because it amounts to a small share of the total income its contribution to the total inequality is of 3%. The sector composition effects on inequality are times higher than the segmentation (price) effects. These conclusions are robust to changes in the definition of the sectors and to different estimation techniques.
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