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Matheus O. de Alencar, Jair A. Araujo, Wellington R. Justo and Celina Santos de Oliveira
( 2019, Vol. 39 No.2 )
This study analyzes the determinants of wage inequality in Brazilian municipalities from 2007 to 2016, based on panel data regressions of municipal variables calculated from microdata contained in the Annual Social Information Reports (RAIS) submitted by companies to the Ministry of Labor (MTE). In general, the main hypothesis was confirmed, namely a positive relationship between wage inequality and the number of formal jobs (a proxy for municipal size), i.e., municipalities with larger populations tend to have higher inequality levels. The same relationship was observed for the average monthly salary of the municipality. Besides this, the results indicate a positive effect on wage inequality of the proportion of workers in the financial sector, in the public sector, with college education and men in the workforce. In summary, a large part of the wage inequality in Brazil at the local level is generated by wage differences between sectors (e.g., percentage participation in the public and financial sectors), level of schooling (stock of human capital) and worker gender.
Keywords: Inequality; Wages; Municipalities.
JEL: D6 - Welfare Economics: General
R2 - Urban, Rural, and Regional Economics: Household Analysis: General
Manuscript Received : Nov 06 2018 Manuscript Accepted : Apr 25 2019

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