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12 - The Evolution of Industrial Earnings Inequality in Mexico and Brazil
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- By Paulo Du Pin Calmon, University of Brasilia, Pedro Conceição, Institut Superior Tecnico, Lisbon, James K. Galbraith, University of Texas, Vidal Garza Cantú, Instituto Tecnológico y de Estudios Superiores de Monterrey, Abel Hibert Sanchez, Grupo Pulsar Internacional, Monterrey, Mexico
- Edited by James K. Galbraith, University of Texas, Austin, Maureen Berner, University of North Carolina, Chapel Hill
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- Book:
- Inequality and Industrial Change
- Published online:
- 05 June 2012
- Print publication:
- 09 April 2001, pp 227-237
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Summary
In this chapter, we use industrial data to derive estimates of the pattern of change in wage inequality in Mexico and Brazil. Using the group decomposition of Theil's T statistic, we present monthly changes in the dispersion of industrial wages for Brazil (1976 through 1995) and for Mexico (1968 through 1998). Both countries show increases in wage dispersion over time, and we find a strong negative correlation with the rate of real economic growth. Other things being equal, the later Brazilian heterodox stabilization plans seem to have reduced inequality in the short run.
Introduction
A great many things have been written about inequality on the basis of evidence that may charitably be described as thin. As the recent work of Deininger and Squire (1996a) makes clear, the measurement of household and personal income inequality for most countries has been sporadic and of uneven quality. Even where these authors judge the data to be of acceptable quality, the number of observations is generally too few to permit useful time-series analysis. Over the quarter century from 1970 to 1995, Deininger and Squire find only fourteen acceptable estimates for Brazil and only five for Mexico.
This chapter presents measurements of change in the dispersion of industrial wages for Brazil from 1976 through 1995 and for Mexico from 1968 through 1998.
5 - Industries, trade, and wages
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- By James K. Galbraith, University of Texas, Paulo Du Pin Calmon, University of Texas
- Edited by Michael A. Bernstein, University of California, San Diego, David E. Adler
- Foreword by Robert Heilbroner
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- Book:
- Understanding American Economic Decline
- Published online:
- 05 June 2012
- Print publication:
- 29 July 1994, pp 161-198
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Summary
Whether the American economy as a whole has been declining is, perhaps, more of a political than an analytical question. Pessimists point to budget deficits, trade deficits, slow measured productivity growth, job loss, and “deindustrialization.” Optimists however can point to emerging technologies, strong aggregate growth as compared with, say, Europe, and the continuing market test of demand for immigration to the United States. There is no simple answer to a question for which no simple metric can exist.
Unquestionably, though, American society and economic life are changing. One change particularly stands out: after 1980 the distribution of income became much more unequal. Tax reductions skewed to the wealthy, high interest rates, cuts in government services, and recessions affecting the poor all contributed to this change. But so, and importantly for an understanding of industrial change in America, did changes in the distribution of industrial wage income.
The nature of changing wage inequality is easier to describe than to explain. Numerous studies of worker characteristics have shown that, in general, the 1980s reinforced the association of education and earnings. The relative wage of workers with high educational attainment rose, and that of those without such attainment declined.