Income distribution in Brazil: an analysis for the period of greater reduction of inequality

Abstract

In Brazil, there is a great disparity in income between social classes. In 2013, the richest 10% of the economically active population had a share of 41.7% in total income while 50% of the population had a share of 17.4% of income (IBGE, 2014). There are indications of a decrease in this inequality due to social programs. This study analyzes income distribution in Brazil between 2004 and 2015, observing changes according to the source of income, exposing the Gini coefficient, dominance and decomposition. Income from work, from income transfers (interest on savings accounts and other financial applications, dividends, social programs and other government transfer income), from social security indexed to the minimum wage and other social security income, in addition to other incomes. The method uses analysis of secondary data and specific indicators of income concentration (Gini Index and Lorenz Curve), as well as the decomposition of the Gini index by source of income. It is possible to state that 2015 is the best in this regard income distribution, with a Gini of 0.513. The Gini decomposition showed that labor income is the one that has the greatest share in per capita income, with 76.8%, the highest income is the one that most distributes, and its concentration decreases 5 .7% compared to 2004. Interest income and Bolsa Família were important in the distribution, increasing their participation in total per capita income by 38% from 2004 to 2014.