Inequality in Brazil: the contribution of pensions

Abstract

This paper analyzes the contribution of components of per capita household income to total inequality of the income distribution in Brazil and its regions, using the corresponding decomposition of the Gini index. The income components considered are: income from the main job (activity), income from other jobs, pensions, donations, rent, interest, and other incomes. Only income from the main job and donations have a concentration ratio that is lower than the overall Gini index. One of the main results is that income from pensions contributes to increase overall inequality in Brazil, particularly in the metropolitan regions. Given the aging of the population, without change in the pension rules, the contribution of pensions in increasing inequality will be even stronger in the future.