Regional Differences in the Gender Earnings Gap in Brazil: Development, Discrimination, and Inequality

This paper studies the decomposition of the gender earnings gap in the Brazilian labor market using microdata from the 2010 Brazilian census. Counter-intuitively we find that the gender earnings gap in favor of males widens with increased GDP per capita. Firstly, we find that females present higher schooling than males, which is consistent with the higher return to schooling among females. Secondly, the effect of the female schooling advantage on income is magnified by the local level of income inequality. Thirdly, through decomposition, we obtain the component due to discrimination (or any factor independent of schooling that undervalues female characteristics) against women. Finally, the explanation for the counter-intuitive result is that while gender discrimination reduces with GDP per capita, somehow the level of income inequality reduces more quickly, resulting in a gender earnings gap that widens with increased GDP per capita.