Historical Inequality and Long Term Development in Brazil
Objectives: We are collecting a large amount of historical data that has never been used before, therefore a large part of our study is exploratory by nature. By long term development we mean the distribution (concentration) of growth. In parallel to data collection we are working with the construction of a theoretical framework for a growth appropriation statistical measure. Our work relates, directly, growth and inequality. In this sense, our research complements the previous existing research on the determinants of aggregate growth or, put in another way, we are adding a perspective of distribution to an economic history based on the history of (aggregate) production.
Sources: To cover a long period, we use a mix of data sources. For the period that goes from 1850 to 1960 we use historic documents. From 1960 to 1974, a mix of microdata and published statistics. From 1974 onwards, survey microdata supplemented by administrative records.
Methods: Mostly statistical decompositions, including regression-based decompositions.
Challenges: We are covering a very large period with a multitude of data. Our main challenges are period-related. From 1850 to 1960, data collection (finding and digitalizing data); from 1960 to 1980, survey data harmonization, combination of survey and administrative records to obtain complete income distributions, data extrapolation (imputation) to correct survey geographical coverage deficiencies. From 1980 to today, most of the harmonization of surveys has already been done.
Findings: This is newly found data. So far we have only performed data quality tests with small samples and the tests indicate that the data has good quality, but we cannot anticipate any findings based on the data we have. From 1920 to 2019 we have already an income concentration series (for the richests 1%). The results suggest that, contrary to conventional expectations, inequality does not increase substantially during growth spells; it increases after recessions, possibly due to the pro-rich nature of economic recovery policies. We have also indications that primary and secondary education are less important as determinants of long term wage inequality than previously thought.