 |
Economic Inequality and Political Power: A Comparative Analysis of Argentina and Brazil
| |
| | Unformatted Document Text:
1
I. Introduction
This paper compares the evolution of pay inequality in Argentina and Brazil
from the early 1990s through 2005, covering the period of high neoliberalism in both countries, the respective crises and their aftermath, which in both countries involved a retreat from neoliberal globalization. It shows specifically how different economic sectors, and by extension the workers within those sectors, were affected by the structural adjustments that occurred in Brazil and Argentina.
This analysis is accomplished by decomposing Theil’s T statistic in several ways.
First, we show whether an underlying cause of an increase or decrease in pay inequality is predominantly across or within provinces and/or economic sectors. Secondly, we show how the different sectors, and also the different regions contributed to changes in pay inequality from year to year. Finally, we decompose Theil statistics into parts attributable to changes in relative incomes, on one hand, and changes in population or employment structures, on the other. These income and population effects show the character of the changing contributions of each sector and region to inequality, by which the “winners” and “losers” can be identified. Behind these outcomes are the policies that favor one sector (and/or region) over another, protecting wage earners in certain sectors (and/or regions), while putting them in jeopardy in others.
We base the analysis on entirely novel data sets for both countries, permitting us
to measure changes in inequality year to year and even month to month and to capture in fine detail the contribution to inequality of the changing position of every major economic sector and every geographic region (provinces and states). This approach permits investigation into the relationship between public policies, the distribution of power, and the distribution of income in these countries to proceed with a foundation in fact not previously available. The data clearly reflect the changing position of the most influential economic sectors, including the state, the banks, the trade unions and the energy producers.
Thus we show how increasing inequality in Argentina and specifically the
concentration of income in the financial sector and in Buenos Aires city preceded the economic crisis of December 2001 and how inequality began to decrease as these factors were reversed post crisis. Brazil, which entered the period with one of the most unequal economies in the world, had already stabilized its distribution of pay with the Plan Real in the first part of the 1990s. This achievement was followed by decreases in pay inequality towards the end of the decade. A marked feature of this trend was a decline in incomes earned in the financial sector, and a gradual increase in the employment and wages of the civil service. By these measures, inequality in Brazil now appears to have declined to levels not seen since before the deep crisis of the early 1980s.
The common characteristic in both countries is that the financial sector is the
biggest contributor to economic inequality; the period leading up to the crisis is characterized by an increase in the weight of this sector, and we observe a corresponding decline in that weight as the crisis passes and a more normal situation returns. What is
|
| | Authors: Galbraith, James., Spagnolo, Laura. and Pinto, Sergio. |
|
| |
|
|
1
I. Introduction
This paper compares the evolution of pay inequality in Argentina and Brazil
from the early 1990s through 2005, covering the period of high neoliberalism in both
countries, the respective crises and their aftermath, which in both countries involved a
retreat from neoliberal globalization. It shows specifically how different economic
sectors, and by extension the workers within those sectors, were affected by the
structural adjustments that occurred in Brazil and Argentina.
This analysis is accomplished by decomposing Theil’s T statistic in several ways.
First, we show whether an underlying cause of an increase or decrease in pay inequality is
predominantly across or within provinces and/or economic sectors. Secondly, we show
how the different sectors, and also the different regions contributed to changes in pay
inequality from year to year. Finally, we decompose Theil statistics into parts attributable
to changes in relative incomes, on one hand, and changes in population or employment
structures, on the other. These income and population effects show the character of the
changing contributions of each sector and region to inequality, by which the “winners”
and “losers” can be identified. Behind these outcomes are the policies that favor one
sector (and/or region) over another, protecting wage earners in certain sectors (and/or
regions), while putting them in jeopardy in others.
We base the analysis on entirely novel data sets for both countries, permitting us
to measure changes in inequality year to year and even month to month and to capture
in fine detail the contribution to inequality of the changing position of every major
economic sector and every geographic region (provinces and states). This approach
permits investigation into the relationship between public policies, the distribution of
power, and the distribution of income in these countries to proceed with a foundation in
fact not previously available. The data clearly reflect the changing position of the most
influential economic sectors, including the state, the banks, the trade unions and the
energy producers.
Thus we show how increasing inequality in Argentina and specifically the
concentration of income in the financial sector and in Buenos Aires city preceded the
economic crisis of December 2001 and how inequality began to decrease as these factors
were reversed post crisis. Brazil, which entered the period with one of the most unequal
economies in the world, had already stabilized its distribution of pay with the Plan Real
in the first part of the 1990s. This achievement was followed by decreases in pay
inequality towards the end of the decade. A marked feature of this trend was a decline in
incomes earned in the financial sector, and a gradual increase in the employment and
wages of the civil service. By these measures, inequality in Brazil now appears to have
declined to levels not seen since before the deep crisis of the early 1980s.
The common characteristic in both countries is that the financial sector is the
biggest contributor to economic inequality; the period leading up to the crisis is
characterized by an increase in the weight of this sector, and we observe a corresponding
decline in that weight as the crisis passes and a more normal situation returns. What is
|
|
 Convention | | Convention is an application service for managing large or small academic conferences, annual meetings, and other types of events! | | Submission - Custom fields, multiple submission types, tracks, audio visual, multiple upload formats, automatic conversion to pdf. | | Review - Peer Review, Bulk reviewer assignment, bulk emails, ranking, z-score statistics, and multiple worksheets! | | Reports - Many standard and custom reports generated while you wait. Print programs with participant indexes, event grids, and more! | | Scheduling - Flexible and convenient grid scheduling within rooms and buildings. Conflict checking and advanced filtering. | | Communication - Bulk email tools to help your administrators send reminders and responses. Use form letters, a message center, and much more! | | Management - Search tools, duplicate people management, editing tools, submission transfers, many tools to manage a variety of conference management headaches! | | Click here for more information. |
|
|
|
| |
|
|
|
