Income inequality in Brazil, 1995-2019: several distributions and the impact of unemployment

Abstract

This article analyzes the distribution of income in Brazil from 1995 to 2019 based on data from the National Household Sample Survey (PNAD). The distribution of household income per capita, the distribution of income from work among employed people and the distribution of income from work among economically active people are considered, arguing that the latter is the most appropriate if the focus of the analysis is the labor market.  It is shown that, although there are important methodological differences between the traditional PNAD and the Continuous PNAD (with the latter better capturing the inequality of income distribution), it is perfectly possible to concatenate the series of results of the two surveys. The analysis of the distribution of per capita household income from 1995 to 2019 shows a substantial reduction in poverty and inequality until 2014. Unfortunately, in the period 2014-2019 there is an inversion in the direction of these changes, losing about 1/3 of the reduction in inequality and 1/4 of the poverty reduction achieved in the previous period. It is shown that, in a crisis situation like the one that occurred in Brazil from 2015 onwards, the analysis limited to employed people does not show the real increase in inequality.