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Interpreting Brazilian Income Distribution Trends
Don CoesUniversity of New Mexico
In his long career teaching so many of us to ask the important questions about the Brazilian economy, Werner Baer has often focused on its unequal distribution of income. The persistence of inequality for so much of its history has troubled him, as it has so much of the Brazilian economics profession. It would be optimistic to think that we will soon have much better answers or better policies than we currently do, but surely an important step on that journey begins by asking the right questions. Werner’s intellectual style has always been to look at the actual numbers, rather than try to extract some delicate hypotheses from a theoretical model.
This paper attempts to follow that tradition in asking how we should interpret some of the income distribution numbers that we do have. That large task, as he has often shown us, begins by asking a lot of questions. A few of the many ones he might ask are the focus of our discussion here. The paper begins with a brief summary of recent trends in the Brazilian distribution of personal income. The next section turns to the question of how we might weight the welfare of the different groups that receive Brazil’s income, suggesting the use of “stochastic dominance” criteria for making welfare judgments for data like those from Brazil. In the next section we look at some of the demographic, age structure, and geographic issues that arise in the interpretation of Brazil’s income distribution data. We conclude, as Werner often has, with as many questions as we started with, but hopefully, more informed ones.
1. Structure and trends in the distribution of Brazilian income
Brazilian income data before the 1980s has many limitations. They became apparent in the 1970s, as tabulations of census information from the Instituto Brasileiro de Estatística e Geografia (IBGE)’s decennial censuses taken in 1960 and 1970 seemed to indicate that the
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