Income inequality decrease determinants in brazilian regions between 2001 and 2015

Abstract

This paper aims to systematize the explanations for income inequality decreases observed in Brazil between 2001 and 2015, analyzing each region and subperiod separately and focusing on social programs. The results indicate that social program incomes, as well as pension incomes, have gained prominence as income sources relative to labor income. Social program incomes contributed 19% to income inequality decreases, especially in the North and Northeast, between 2001-2004 and 2008-2012. However, this contribution declined in the Northeast and increased in the Southeast at the beginning of the great recession. Labor income contributed 57% to income inequality decreases and explains why a sharper decrease was noted in the South and Center-West regions. Official pensions contributed 17% to inequality reductiomn in all Brazilian regions, more strongly between 2004 and 2012, when significant minimum wage increases occurred.