The Structure of Worker Compensation in Brazil, with a Comparison to France and the United States

43 Pages Posted: 16 Feb 2006

See all articles by Naercio Menezes-Filho

Naercio Menezes-Filho

Universidade de Sao Paolo - Department of Economics; Institute for Fiscal Studies (IFS)

Marc-Andreas Muendler

University of California, San Diego (UCSD) - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics

Date Written: January 2006

Abstract

We employ a comprehensive matched employer-employee data set for Brazil to analyze wage determinants and compare results to Abowd, Kramarz, Margolis and Troske (2001) for French and U.S. manufacturing. Returns to education and experience in Brazilian manufacturing exceed those of the other countries, while occupation differentials are similar. The gender differential in Brazilian and U.S. manufacturing coincides, and is considerably smaller than in France. Estimates are unaffected by selectivity of Brazilian workers into formal employment. The links between firm performance and wage components in Brazil resemble those of France. Worker characteristics have comparable explanatory power for manufacturing wage variability in the three countries but establishment-fixed effects explain relatively less of the Brazilian wage variation. Despite the inclusion of establishment effects, regressors predict at most sixty percent of wage variability in any Brazilian sector, suggesting that explanations for earnings variability ought to focus on worker characteristics, not establishment wage policies.

Keywords: wage structure, wage inequality, matched employer-employee data, formal and informal employment, selectivity, Brazil

JEL Classification: J31, D21

Suggested Citation

Menezes-Filho, Naercio and Muendler, Marc-Andreas and Ramey, Garey, The Structure of Worker Compensation in Brazil, with a Comparison to France and the United States (January 2006). CESifo Working Paper Series No. 1643, Available at SSRN: https://ssrn.com/abstract=884336 or http://dx.doi.org/10.2139/ssrn.884336

Naercio Menezes-Filho

Universidade de Sao Paolo - Department of Economics ( email )

Sao Paolo, 05508-010
Brazil

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Marc-Andreas Muendler (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-4799 (Phone)
858-534-7040 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-5721 (Phone)
858-534-7040 (Fax)

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