Annual Report 2018
Economics
The inclusion of controls for company (firm fixed effects) accounts for a large part of the
unequal pay between genders.
.
Unequal pay due to gender increases with rising educational level.
EDUCATION, LIFE CYCLE AND GENDER
INEQUALITY IN THE FORMAL BRAZILIAN
LABOR MARKET
Although gender inequality in pay has declined over the generations
in Brazil, it increases over the life cycle of workers and also with their
educational level.
For all schooling levels, even after controlling for all the observable characteristics, the
remaining gender inequality is between 10% and 20% during the worker life cycle.
CONTRIBUTIONS OF THE STUDY
•
•
The results are groundbreaking in the Brazilian literature.
The study explores in longitudinal form data on firms and workers in Brazil from the RAIS.
The latest modes of analysis about the evolution of gender differences were applied in
the Brazilian case, indicating a decline of inequality from 1994 to 2014.
Although the focus is on the question of differences among workers due to gender, the
study reveals, in a context of lifecycle with multivariate models and long-run longitudinal
data, the importance of the firm effect on wage inequality in the formal Brazilian labor
market. This was twice as important as formal education and other individual character-
istics, for example.
APPLICATIONS OF THE RESULTS AND POSSIBLE EXTENSIONS OF THE STUDY
•
•
The study was described in a news story on TV, expanding the diffusion of the knowledge
in society.
The study was presented at the table of the Inter-American Development Bank (IDB) at
the 45th National Economic Meeting (ANPEC).
The study is the most comprehensive analysis of Brazilian inequality in comparison with
other countries analyzed by the United Nations (UN). The results have been presented at
various events abroad.
OBJECTIVE
To study the pattern of gender inequality over time and during workers' life cycle, using
data that connect employers and employees with different schooling levels in the formal
job market in Brazil.
RESEARCH METHOD
•
Longitudinal data corresponding to employer-employee were extracted from the doc-
ument called Annual Report of Social Information (RAIS), based on reports by firms to
Brazil's Ministry of Labor from 1994 to 2015.
An econometric model was estimated that considers a specific set of workers divided
into three educational levels. The focus is to estimate the pattern of wage gender inequal-
ity during the two decades after leaving school.
The model was expanded to include controls for the specific effects of employment; to
evaluate the effect of occupation/sector and firm characteristics; and also to include
controls for specific firm effects.
RESULTS
•
Inequality in pay by gender has decreased over the generations when comparing workers
of different ages.
Gender inequality in pay increases during the life cycle of the same cohort until 40 years
of age, when it starts to decline until retirement.
1 The specific characteristics of each firm explain, in large part, the wage inequalities in the formal sector.
AUTHOR:
Marcelo Neri.
RESEARCHERS:
Cecília Machado and Valdemar Neto.
ORGANIZATION:
Center for Social Policy (Social) and EPGE Brazilian School of Economics and Finance
(EPGE).
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Annual Report 2018
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RESEARCHView entire presentation