Quantitative Economics
Journal Of The Econometric Society
Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331
Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331
Quantitative Economics: Nov, 2022, Volume 13, Issue 4
https://doi.org/10.3982/QE1855
p. 1405-1446
Niklas Engbom, Gustavo Gonzaga, Christian Moser, Roberta Olivieri
Using rich administrative and household survey data spanning 34 years from 1985 to 2018, we document a series of new facts on earnings inequality and dynamics in a developing country with a large informal sector: Brazil. Since the mid‐1990s, both inequality and volatility of earnings have declined significantly in Brazil's formal sector. Higher‐order moments of the distribution of earnings changes show cyclical movements in Brazil that are similar to those in developed countries like the US. Relative to the formal sector, the informal sector is associated with a significant earnings penalty and higher earnings volatility for identical workers. Earnings changes of workers who switch from formal to informal (from informal to formal) employment are relatively negative (positive) and large in magnitude, dispersed, negatively (positively) skewed, and less leptokurtic. Our results suggest that informal employment is an imperfect insurance mechanism.
Niklas Engbom, Gustavo Gonzaga, Christian Moser, and Roberta Olivieri
Niklas Engbom, Gustavo Gonzaga, Christian Moser, and Roberta Olivieri
August 27, 2024