This paper documents the evolution and the determinants of earnings inequality in the Brazilian formal sector from 1994 to 2015, using establishment level data. In 2015, schooling explained 33 per cent of overall inequality. Firm-specific effects explain 65 per cent of total inequality level and...

Education-related changes are often argued as the main reasons for changes in earnings distribution. However, omitted variable and measurement error biases possibly affect econometric estimates of these effects. Brazil experienced a sharp fall of individual labour income inequality between 1996...