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

We employ comprehensive linked employer-employee data for Brazil to analyze wage determinants and compare results to Abowd et al. (2001) for French and U.S. manufacturing. While returns to human capital in Brazilian manufacturing exceed those of the other countries, occupation and gender differentials are similar. The worker-characteristics component accounts for much of the greater wage inequality in Brazil, but the establishment-fixed component has scant explanatory power. Thus, firm- or industry-level factors offer little scope for explaining the differences in wage inequality. Brazil's wage structure resembles that of France, a country with some similarity in labor market institutions. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.