Labour Market Inequality in Brazil and India

Aims& Objectives: This project focused on understanding the pattern and determinants of labour market inequality in India and Brazil through a historical analysis of changing patterns of inequality and their origins in socio‐economic and political institutions.

Methodology: The study was based on a quantitative analysis of household survey data at different points in time.

Findings: The main findings were:

• Periods of high growth in both countries were associated with declining absolute poverty but increasing inequality, which leads to an increase in relative poverty in these periods;
• The sectored pattern of growth and the volume and type of employment played a key role in generating differentiated labour markets;
• The distribution of incomes between wages and profits showed very different trends between India and Brazil;
• In Brazil, an increase in GDP growth after 2000 was associated with a disproportionate increase in formal job creation while India witnessed jobless growth;
• Liberalisation and deregulation contributed to the growth of labour market inequality in India, but this was much less evident in Brazil;
• The gaps between skilled and white collar occupations on the one hand, and casual or production workers on the other, widened in India and shrunk in Brazil due to the rapid increase in the minimum wage in Brazil;
• Education is associated with large wage differentials in both countries;
• Regional inequality is significant in both countries, but there is a clear difference in the trends.

The outputs from this project were presented through background papers on research methods, comparative, historical and quantitative country papers and policy reviews (on the potential reduction of labour market inequality through vocational training, education and minimum wage policy). A book titled ‘Patterns of Inequality in the Indian Labour Market 1983–2012’ by Gerry Rodgers and Vidhya Soundararajan was published by the Academic Foundation and IHD in 2016.