Wage differentials associated with race between 2002 and 2014 in Brazil: evidence from a quantile decomposition

Frio, Gustavo Saraiva; Fontes, Luiz Felipe Campos

doi:10.1590/1984-9250872

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Article • Organ. Soc. 25 (87) • Oct-Dec 2018 • https://doi.org/10.1590/1984-9250872 copy

Wage differentials associated with race between 2002 and 2014 in Brazil: evidence from a quantile decomposition

Diferenças salariais devido à raça entre 2002 e 2014 no Brasil: evidências de uma decomposição quantílica

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

Throughout the 2000s Brazil went through a great phase of economic development. The present study seeks to investigate whether this movement was accompanied by a reduction in inequality in the labor market, measured here by the wage gap between whites and non-whites. To do so, three cohorts of time (2002-2004, 2007-2009 and 2012-2014) were analyzed using the microdata of the National Household Sampling Survey (Pesquisa Nacional de Amostragem Domiciliar - Pnad). The applied method is the counterfactual Oaxaca-Blinder along with the Recentered Influence Function Regression (RIF-Regression) so that the main determinants of wage inequalities can be detailed throughout the salary distribution. Our results showed that wage gap (totals, due to observed factors and discrimination) are higher in the higher quantiles of the distribution, that is, in professions or activities with higher wages. The results also point that the wage gap between the groups decreased during the analyzed period, which was mainly due to observable characteristics, especially educational levels. However, discrimination decreased only between the first and second triennium and in low magnitude. Apart from that, the main determinants of racial wage gap are returns related to education, experience and professions considered unregulated (self-employment and informal workers).

Keywords:
Racial wage gap; Oaxaca-Blinder; Recentered Influence Function Regression

Variables	Description
Ln_Wages	Wage/hour natural logarithm.
Education	Worker’s years of education.
Specific Experience	Worker’s experience in the company they are in, in years.
Specific Experience^2	Specific Experience squared.
Experience	Current worker age - the age at which they started to work, in years.
Experience^2	Experience squared.
Unionized	Dummy equal to 1 if the worker is unionized and 0 if otherwise.
Metropolitan	Dummy equal to 1 if the worker lives in a metropolitan area and 0 if otherwise.
Urban	Dummy equal to 1 if the worker lives in an urban area and 0 if otherwise.
Married	Dummy equal to 1 if the worker is married and 0 if otherwise.
Male	Dummy equal to 1 if the worker is male and 0 if otherwise.
White	Dummy equal to 1 if the worker is white and 0 if otherwise.
Head of the household	Dummy equal to 1 if the worker is the head of the household and 0 if otherwise.
Born in the municipality	Dummy equal to 1 if the worker lives in the city where they were born and 0 if otherwise.
Occupation^a	Dummies for the following work occupations: formal contract, military, public service, no formal contract, domestic with a formal contract, domestic without a formal contract, self-employed and employer.
CBO	Dummies for professions according to the 2002 Brazilian Occupations Classification (CBO).
UF	Dummies for federated states (UF).

Variables	2002-2004		2007-2009		2012-2014
Variables	White	Non-white	White	Non-white	White	Non-white
Wages	8.04	4.29	9.33	5.44	13.38	8.22
Wages	(23.18)	(9.69)	(24.64)	(14.13)	(61.94)	(31.1)
Education	9.04	7.14	9.81	8.07	10.46	8.81
Education	(4.37)	(4.22)	(4.33)	(4.32)	(4.25)	(4.33)
Specific experience	7.28	7.00	7.59	7.2	7.84	7.40
Specific experience	(8.58)	(8.73)	(8.93)	(8.98)	(9.22)	(9.31)
Experience	21.96	21.77	22.27	22.04	22.74	22.54
Experience	(13.85)	(13.36)	(13.61)	(14.50)	(13.70)	(13.61)
Unionized	0.19	0.15	0.19	0.16	0.17	0.15
Unionized	(0.39)	(0.35)	(0.39)	(0.37)	(0.80)	(0.36)
Metropolitan	0.41	0.38	0.40	0.37	0.41	0.36
Metropolitan	(0.49)	(0.48)	(0.49)	(0.48)	(0.49)	(0.48)
Urban	0.89	0.84	0.88	0.83	0.90	0.84
Urban	(0.31)	(0.36)	(0.32)	(0.37)	(0.30)	(0.36)
Married	0.77	0.74	0.76	0.73	0.75	0.72
Married	(0.42)	(0.44)	(0.43)	(0.44)	(0.43)	(0.45)
Male	0.47	0.49	0.47	0.49	0.47	0.49
Male	(0.50)	(0.50)	(0.50)	(0.50)	(0.50)	(0.50)
Head of the household	0.40	0.39	0.40	0.41	0.41	0.43
Head of the household	(0.49)	(0.49)	(0.49)	(0.49)	(0.49)	(0.49)
Born in the city	0.48	0.50	0.50	0.51	0.52	0.54
Born in the city	(0.50)	(0.50)	(0.50)	(0.50)	(0.50)	(0.50)
Observations	217,844	216,312	256,486	221,864	197,164	251,072

Occupation	2002-2004		2007-2009		2012-2014
Occupation	White	Non-white	White	Non-white	White	Non-white
Employee with a formal contract	35.15%	27.5%	39.98%	32.33%	43.85%	37.86%
Military	0.4%	0.37%	0.36%	0.35%	0.43%	0.43%
State Public Service	8.1%	6.44%	8.56%	6.8%	8.84%	6.94%
Employee without a formal contract	15.55%	20.54%	14.25%	18.64%	12.37%	16.01%
Domestic worker with a formal contract	1.95%	2.36%	1.85%	2.43%	1.82%	2.46%
Domestic worker without a formal contract	4.28%	7.31%	4.05%	6.9%	3.35%	5.63%
Self-employed	21.67%	24.01%	19.98%	22.06%	19.88%	22.09%
Employer	5.98%	2.56%	5.98%	2.68%	5.36%	2.3%
Other occupations	6.92%	8.91%	4.99%	7.81%	4.10%	6.28%

Variables	2002-2004		2007-2009		2012-2014
Variables	Whites	Non-whites	Whites	Non-whites	Whites	Non-whites
Education	0.066*	0.046*	0.061*	0.039*	0.058*	0.037*
Education	(0.001)	(0.001)	(0.001)	(0.000)	(0.001)	(0.000)
Specific Experience	0.029*	0.020*	0.026*	0.015*	0.024*	0.015*
Specific Experience	(0.001)	(0.000)	(0.001)	(0.000)	(0.001)	(0.000)
Specific Experience^2	-0.001*	-0.0004*	-0.0005*	-0.0003*	-0.0004*	-0.0003*
Specific Experience^2	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Experience	0.019*	0.016*	0.020*	0.016*	0.018*	0.016*
Experience	(0.000)	(0.001)	(0.000)	(0.000)	(0.001)	(0.000)
Experience^2	-0.0002*	-0.0002*	-0.0003*	-0.0002*	-0.0003*	-0.0002*
Experience^2	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Unionized	0.117*	0.104*	0.110*	0.095*	0.099*	0.080*
Unionized	(0.004)	(0.004)	(0.004)	(0.004)	(0.005)	(0.004)
Metropolitan	0.169*	0.123*	0.138*	0.105*	0.122*	0.096*
Metropolitan	(0.004)	(0.005)	(0.004)	(0.004)	(0.004)	(0.004)
Urban	0.112*	0.078*	0.102*	0.054*	0.097*	0.056*
Urban	(0.007)	(0.006)	(0.007)	(0.005)	(0.007)	(0.004)
Married	0.090*	0.066*	0.077*	0.057*	0.063*	0.052*
Married	(0.004)	(0.004)	(0.004)	(0.003)	(0.004)	(0.003)
Male	0.103*	0.062*	0.155*	0.093*	0.175*	0.138*
Male	(0.005)	(0.005)	(0.004)	(0.004)	(0.004)	(0.003)
Head of Household	0.145*	0.118*	0.103*	0.077*	0.095*	0.059*
Head of Household	(0.004)	(0.004)	(0.004)	(0.003)	(0.004)	(0.003)
Born in the city	-0.044*	-0.059*	-0.042*	-0.050*	-0.041*	-0.051*
Born in the city	(0.004)	(0.003)	(0.004)	(0.003)	(0.004)	(0.003)
Constant	0.583*	0.781*	0.705*	1.086*	1.124*	1.223*
Constant	(0.067)	(0.083)	(0.069)	(0.062)	(0.087)	(0.077)
Observations	217,844	216,312	221,864	256,486	197,164	251,072
Adjusted R²	0.372	0.320	0.364	0.295	0.340	0.273

Variable	2002-2004			2007-2009			2012-2014
Variable	Q.10	Q.50	Q.90	Q.10	Q.50	Q.90	Q.10	Q.50	Q.90
Years of education	0.074* (0.002)	0.094* (0.001)	0.197* (0.003)	0.064* (0.002)	0.070* (0.001)	0.154* (0.002)	0.058* (0.002)	0.061* (0.001)	0.115* (0.002)
Specific Experience	0.005* (0.001)	0.008* (0.001)	0.015* (0.001)	0.008* (0.001)	0.008* (0.000)	0.017* (0.001)	0.009* (0.001)	0.009* (0.000)	0.016* (0.001)
Experience	0.001 (0.001)	0.001 (0.001)	0.002 (0.001)	0.002* (0.001)	0.002* (0.001)	0.004* (0.001)	0.002* (0.000)	0.003* (0.001)	0.004* (0.001)
Unionized	-0.003* (0.000)	0.005* (0.000)	0.018* (0.001)	-0.002* (0.000)	0.003* (0.000)	0.011* (0.001)	-0.002* (0.000)	0.002* (0.000)	0.006* (0.000)
Metropolitan	0.005* (0.000)	0.004* (0.000)	0.004* (0.000)	0.004* (0.000)	0.002* (0.000)	0.003* (0.000)	0.007* (0.000)	0.003* (0.000)	0.005* (0.000)
Urban	0.004* (0.001)	0.003* (0.000)	0.005* (0.000)	0.005* (0.001)	0.002* (0.000)	0.006* (0.000)	0.008* (0.001)	0.002* (0.000)	0.006* (0.000)
Married	0.002* (0.000)	0.002* (0.000)	0.002* (0.000)	0.002* (0.000)	0.002* (0.000)	0.002* (0.000)	0.001* (0.000)	0.001* (0.000)	0.002* (0.000)
Male	-0.006* (0.000)	-0.002* (0.000)	-0.007* (0.000)	-0.006* (0.000)	-0.004* (0.000)	-0.010* (0.001)	-0.008* (0.000)	-0.006* (0.000)	-0.012* (0.001)
Head of Household	-0.002* (0.000)	-0.002* (0.000)	-0.003* (0.000)	-0.002* (0.000)	-0.002* (0.000)	-0.003* (0.000)	-0.002* (0.000)	-0.002* (0.000)	-0.004* (0.000)
Born in the city	0.001* (0.000)	0.001* (0.000)	0.001* (0.000)	0.000* (0.000)	0.000* (0.000)	0.000* (0.000)	0.001* (0.000)	0.000* (0.000)	0.001* (0.000)
Statutory	-0.003* (0.000)	0.002* (0.000)	0.013* (0.001)	-0.003* (0.000)	0.002* (0.000)	0.017* (0.001)	-0.002* (0.000)	0.003* (0.000)	0.015* (0.001)
Employee without a formal contract	0.028* (0.001)	0.014* (0.000)	-0.008* (0.001)	0.029* (0.001)	0.009* (0.000)	-0.009* (0.000)	0.024* (0.001)	0.004* (0.000)	-0.006* (0.000)
Domestic worker without a formal contract	0.033* (0.001)	0.011* (0.000)	-0.014* (0.001)	0.036* (0.001)	0.005* (0.000)	-0.013* (0.000)	0.028* (0.001)	0.000 (0.000)	-0.008* (0.000)
Self-employed	0.022* (0.001)	0.003* (0.000)	-0.010* (0.001)	0.021* (0.001)	0.001* (0.000)	-0.010* (-0.001)	0.021* (0.001)	-0.001* (0.000)	-0.008* (0.000)
Employer	-0.003* (0.001)	0.009* (0.000)	0.043* (0.002)	-0.004* (0.000)	0.007* (0.000)	0.041* (0.002)	-0.004* (0.000)	0.007* (0.000)	0.036* (0.002)

Variable	2002-2004			2007-2009			2012-2014
	Q.10	Q.50	Q.90	Q.10	Q.50	Q.90	Q.10	Q.50	Q.90
Years of education	-0.026*	0.151*	0.113*	-0.023**	0.191*	0.101*	-0.123*	0.196*	0.134*
Years of education	(0.010)	(0.006)	(0.014)	(0.012)	(0.006)	(0.015)	(0.011)	(0.007)	(0.017)
Specific Experience	-0.017	0.057*	-0.056*	-0.035*	0.070*	-0.037*	-0.048*	0.067*	-0.004
Specific Experience	(0.010)	(0.005)	(0.011)	(0.010)	(0.005)	(0.012)	(0.009)	(0.005)	(0.013)
Experience	-0.174*	0.059*	0.016	-0.174*	0.108*	-0.029	-0.123*	0.065*	0.004
Experience	(0.029)	(0.016)	(0.030)	(0.027)	(0.015)	(0.030)	(0.023)	(0.015)	(0.032)
Unionized	0.008*	0.002**	-0.018*	0.008*	0.002**	-0.011*	0.012*	0.003*	0.004
Unionized	(0.001)	(0.001)	(0.003)	(0.001)	(0.001)	(0.003)	(0.001)	(0.001)	(0.003)
Metropolitan	-0.024*	0.018*	0.026*	-0.043*	0.012*	0.031*	-0.059*	0.010*	0.072*
Metropolitan	(0.004)	(0.002)	(0.005)	(0.004)	(0.002)	(0.005)	(0.003)	(0.002)	(0.005)
Urban	0.027	0.029*	0.005	0.029**	0.041*	-0.019	-0.096*	0.036*	-0.026*
Urban	(0.017)	(0.008)	(0.013)	(0.015)	(0.007)	(0.013)	(0.014)	(0.008)	(0.015)
Married	-0.022*	0.018*	0.006	-0.009	0.014*	-0.002	-0.019*	0.008**	-0.003
Married	(0.007)	(0.004)	(0.009)	(0.007)	(0.004)	(0.008)	(0.006)	(0.004)	(0.009)
Male	-0.079*	0.025*	0.010	-0.064*	0.037*	0.000	-0.075*	0.022*	-0.008
Male	(0.007)	(0.004)	(0.009)	(0.006)	(0.003)	(0.007)	(0.005)	(0.003)	(0.009)
Head of Household	-0.037*	0.014*	0.028*	-0.027*	0.013*	0.020*	-0.021*	0.018*	0.017*
Head of Household	(0.005)	(0.003)	(0.007)	(0.004)	(0.003)	(0.006)	(0.004)	(0.002)	(0.006)
Born in the city	0.026*	0.007*	0.007	0.021*	0.004*	-0.002	0.028*	0.005**	0.009
Born in the city	(0.004)	(0.002)	(0.005)	(0.004)	(0.002)	(0.006)	(0.004)	(0.002)	(0.006)
Statutory	0.007*	0.005*	-0.050*	0.007*	0.003*	-0.045*	0.008*	0.003*	-0.020*
Statutory	(0.001)	(0.001)	(0.002)	(0.001)	(0.001)	(0.002)	(0.001)	(0.001)	(0.002)
Employee without a formal contract	0.022*	0.030*	-0.021*	0.028*	0.022*	-0.027*	0.058*	0.013*	-0.014*
Employee without a formal contract	(0.002)	(0.002)	(0.003)	(0.002)	(0.001)	(0.003)	(0.002)	(0.001)	(0.003)
Domestic worker without a formal contract	0.012*	0.027*	-0.000	0.017*	0.017*	-0.002**	0.039*	0.011*	-0.001
Domestic worker without a formal contract	(0.002)	(0.001)	(0.001)	(0.002)	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)
Self-employed	0.076*	0.053*	-0.065*	0.073*	0.041*	-0.050*	0.123*	0.034*	-0.037*
Self-employed	(0.003)	(0.002)	(0.004)	(0.003)	(0.002)	(0.004)	(0.003)	(0.002)	(0.004)
Employer	0.002*	0.001*	-0.020*	0.002*	0.002*	-0.015*	0.002*	0.001*	-0.012*
Employer	(0.000)	(0.000)	(0.002)	(0.000)	(0.000)	(0.002)	(0.000)	(0.000)	(0.001)

Quantile	2002-2004			2007-2009			2012-2014
Quantile	Difference	Explained	Unexplained	Difference	Explained	Unexplained	Difference	Explained	Unexplained
10	0.477* (0.004)	0.316* (0.003)	0.161* (0.004)	0.425* (0.004)	0.297* (0.003)	0.128* (0.004)	0.325* (0.004)	0.224* (0.002)	0.100* (0.003)
20	0.331* (0.003)	0.312 (0.002)	0.019* (0.003)	0.248* (0.002)	0.230* (0.001)	0.019* (0.002)	0.172* (0.002)	0.171* (0.001)	0.001 (0.002)
30	0.378* (0.003)	0.286* (0.002)	0.092* (0.003)	0.256* (0.002)	0.217* (0.002)	0.039* (0.002)	0.242* (0.002)	0.163* (0.001)	0.079* (0.002)
40	0.429* (0.003)	0.294* (0.002)	0.136* (0.002)	0.320* (0.002)	0.233* (0.001)	0.087* (0.002)	0.294* (0.002)	0.228* (0.002)	0.066* (0.002)
50	0.454* (0.003)	0.345* (0.002)	0.109* (0.003)	0.364* (0.003)	0.289* (0.002)	0.075* (0.002)	0.332* (0.003)	0.245* (0.002)	0.086* (0.002)
60	0.487* (0.003)	0.396* (0.003)	0.092* (0.003)	0.393* (0.003)	0.304* (0.002)	0.089* (0.003)	0.357* (0.003)	0.275* (0.002)	0.082* (0.003)
70	0.546* (0.004)	0.415* (0.003)	0.131* (0.003)	0.480* (0.004)	0.359* (0.003)	0.121* (0.003)	0.427* (0.003)	0.292* (0.002)	0.134* (0.003)
80	0.656* (0.004)	0.465* (0.004)	0.191* (0.004)	0.558* (0.004)	0.403* (0.003)	0.155* (0.004)	0.507* (0.004)	0.342* (0.003)	0.165* (0.004)
90	0.722* (0.006)	0.481* (0.005)	0.241* (0.006)	0.647* (0.006)	0.445* (0.004)	0.201* (0.006)	0.572* (0.006)	0.376* (0.004)	0.196* (0.006)

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[TFN1] Source: Prepared by the authors. ^a Occupations associated with having a formal contract or not do not comprise workers who do household chores, so there are specific dummies for domestic workers with or without a formal contract.