The minimum wage and income distribution in Brazil from the 2000s

Abstract

In recent years the Brazilian minimum wage (MW) has gone through an intense process of growth. Different authors have argued that an important part of the improvement in income distribution can be attributed to the increase in the MW in the recent past. Using income elasticities with respect to MW, this paper seeks to estimate the effects of current MW adjustment policy on improving income distribution. The results of simulations show that MW contributed greatly in recent years through the labor market as well as through pensions and other official transfers.

Keywords:
Minimum wage; Income distribution; Family income distribution; Functional income distribution; Elasticity