TY - JOUR
T1 - Firms and the decline in earnings inequality in Brazil
AU - Alvarez, Jorge
AU - Benguria, Felipe
AU - Engbom, Niklas
AU - Moser, Christian
PY - 2018/1/1
Y1 - 2018/1/1
N2 - We document a large decrease in earnings inequality in Brazil between 1996 and 2012. Using administrative linked employer- employee data, we fit high- dimensional worker and firm fixed-effects models to understand the sources of this decrease. Firm effects account for 40 percent of the total decrease and worker effects for 29 percent. Changes in observable worker and firm characteristics contributed little to these trends. Instead, the decrease is primarily due to a compression of returns to these characteristics, particularly a declining firm productivity-pay premium. Our results shed light on potential drivers of earnings inequality dynamics.
AB - We document a large decrease in earnings inequality in Brazil between 1996 and 2012. Using administrative linked employer- employee data, we fit high- dimensional worker and firm fixed-effects models to understand the sources of this decrease. Firm effects account for 40 percent of the total decrease and worker effects for 29 percent. Changes in observable worker and firm characteristics contributed little to these trends. Instead, the decrease is primarily due to a compression of returns to these characteristics, particularly a declining firm productivity-pay premium. Our results shed light on potential drivers of earnings inequality dynamics.
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U2 - 10.1257/mac.20150355
DO - 10.1257/mac.20150355
M3 - Article
AN - SCOPUS:85040579995
SN - 1945-7707
VL - 10
SP - 149
EP - 189
JO - American Economic Journal: Macroeconomics
JF - American Economic Journal: Macroeconomics
IS - 1
ER -