Dados is one of the most widely-read social sciences journals in Latin America. Created in 1966, it publishes innovative works, originating from academic research, by Brazilian and foreign authors. Edited by IESP-UERJ, it aims to reconcile scientific rigor and academic excellence with an emphasis on public debate based on the analysis of substantive issues of society and politics.
Dados n. 11 Rio de Janeiro 1973
Abstract
This article reiterates the author's previous analysis of the factors which explain the increasing inequality of the income distribution in Brazil between 1960 and 1970. ln this analysis, it was observed that there are sufficient theoretical reasons and empirical evidence to believe that a substantial proportion of the inequality increase is associated with the imbalances of the labour market, which occur simultaneously with the development process and are particularly important in the stage of accelerated growth. These imbalances appear because the rate of growth is neither balanced (either from the sectoral or from the regional point of view), nor homogeneous (in fact, differentiation should be considered as one of its more important characteristics). ln the Brazilian case, there was a disproportional expansion of the urban sector relative to the primary sector and, within each of these sectors, of the modern industries relative to the traditional industries. For this reason, the expansion of the derived labour demand is typically non-neutral, i. e., it benefits the more qualified personnel, as a reflection of the advancement of the modern sector which is particularly skill intensive. The final impact over the relative wages is complemented by the differences in the elasticity of the supply of the different types of labour (the more qualified, the more inelastic), and by the peculiarities of the production fonction of formal education, which makes changes on the supply scale to be relatively slow. The model is, thus, sufficiently general to explain not only the relatively more substantial gains of the group belonging to the superior extreme of the distribution, but also the less substantial gains of its inferior deciles. At the same time, the empirical Evidence did not show any systematic trend towards a significant increase of the contribution of the remuneration of physical capital, at least as far as its impact can be correctly expressed by the variable position in the occupation (employed, autonomous, employer). The main results obtained through this analysis are: 1 . The stability of the coefficients representing the impact of the higher levels of education over the income, when the variable position in the occupation was included (and used as a, proxy for the variable access to property) reduced the possibilities of the variable education to make for the effect of wealth concentration. This result reiterates the independent and substantial influence of the differences in education over the individual levels of income. 2. The small marginal contribution of the differences in access to property. Ln 1'970, this contribution was estimated as being of the order of 2,14%, thus inferior to the contribution of all the other variables: education (13,38%), age (7,69%), sex (5,83%), region (5,33%) and activity (3,48% ). 3. On the other hand, when the marginal contribution of this variable is relatively more important - as it is in the primary sector - it is precisely the case in which it cannot unquestionably be said that increasing inequality occurred, since the Lorenz curves relative to 1960 and 1970 intersect. 4. Another indirect evidence is the long run trend towards the fall of the influence of property income over total income. Finally, the author stresses the impossibility of an accurate identification of the independent influence of the wage policy inaugurated after 1964 over the performance of the income distribution of a whole decade. First, its influence would only be observed upon the inferior deciles of the urban sector. ln other words, this is not an explanation allowing for the comprehension of what occurred with the income Profile as a whole. Second, this wage policy would only have reinforced a trend which could theoretically be explained by the high elasticity of unqualified labour. Third, if the explanation is based upon ad hoc factors, consistency requires the evaluation of all policies (or cyclical components), which had potentially important redistributive effects during the decade. Thus, it is useless to analyse the wage policy without at least making some reference to the largely regressive effects of the increasing inflation which prevailed until 1963, or to the impact of the depression crisis between 1963 and 1966. lt is important to understand that the author's main preoccupation in this article is not that of justifying the present income distribution in Brazil. There is a widespread consensus - shared by the author - that the present income distribution is far from being optimum, despite ali the difficulties which exist for a clear and accurate definition of how this distribution could become optimum. What the author tries to show is that it is not correct to explain the increasing inequality during this decade by attributing it exclusively to one of the aspects of the economic policy adopted after 1967. On the other hand, the accurate interpretation of what occurred is essential to the orientation of these policies, whose objectives are those of correcting the observed distortions. ln the author's analysis, the phase of accelerated growth of the development process causes increasing inequality, which nevertheless cannot be considered a welfare indicator. During this imbalanced phase, the conventional distributive measures have very little meaning. The relevant criterium should be the expansion of opportunities. According with this point of view, the author considers accelerated growth as the more important device, since it determines an important impact in terms of a significant increase in the employment level. The problem consists exactly in delineating those policies which, while considering this fundamental objective, can allow the economy to overcome the transitional phase and inaugurate a development stage, by minimizing the imbalances of the different markets, and particularly those of the labour market. This is exactly what the author tries to undertake in the final part of this article, when he discusses the educational, agrarian, health, technological and fiscal policies.
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