The North-South Divide: Real wages and welfare in Brazil during the early 20th century

Abstract

What was the degree of Brazil's regional inequality in living standards during the first decades of the 20th century? This paper presents municipal and state information on wages and prices in order to build welfare ratios for skilled and unskilled workers between 1912 and 1940. Despite the significant differences in nominal wages and costs of living throughout the country, real wage differentials remained lower than those estimated by earlier studies. Williamson (1999) argued that real wages in the Southeast were approximately six times higher than in the Northeast during the 1930s. The new evidence in this paper suggests that wages were on average only 1.5 times higher.