Firms and the Decline of Earnings Inequality in Brazil

Research Note
Published on 26 April 2016


This project decomposes the sources of Brazil’s great inequality decline over the past two decades using a large administrative linked employer-employee dataset spanning 1988-2012. In contrast to commonly articulated stories, the study finds that the fall in earnings inequality was driven by a compression of pay differences between firms, rather than by changes in the distribution of firm productivity.