Brazilian female labor market: Racial-skin color discrimination and inefficiency

Abstract

The myth of racial democracy is still widespread in the Brazilian society, although economic literature has continuously documented pervasive racial discrimination. This study analyzes racial discrimination in the Brazilian female labor market using a Mincer stochastic wage frontier, corrected for sample selection. The results, using Oaxaca-Blinder decomposition, showed that an efficient wage differential, not explained by differences in human capital does exist and is large among the most efficient workers. Wage inefficiencies are also explained and it is a claim of the study that traditional policies might be a tool in reducing underpayment dispersion, but cannot cope with pure discrimination.