Many studies have shown the labor income constitutes the main share of the household income in Brazil. Since the per capita household income reflects the individual consumption set, and so is a good measure of individual welfare, one can infer that the mechanisms of the labor income determination affects directly the social welfare level, which can be defined as a function of the individual welfare levels.
The labor market plays a central role in determining the allocation of part of the firms’ revenue among workers. Such distribution, in a competitive market, should be based on the individual productivity levels. Also, if the workers were able to move freely among different jobs, it can be expected that equally productive workers, doing equally (un)pleasant tasks, would receive the same wage.
In this study, we used income inequality and poverty indicators as measures of welfare. We assumed that the per capita household income is the real constraint to the individual consumption set.
The income that one can obtain in the labor market depends fundamentally on the labor demand and labor supply, and on the degree of imperfections of this market. The first goal of this research is, therefore, to find variables related to the labor supply and to the labor demand conditions, considering the possible market imperfections. Moreover we intend to measure the relative importance of each variable on the labor income determination. As labor-supply related variables, it was chosen some productive characteristics of the workers, such as their educational level and age.
The labor demand structure is represented by job characteristics (some of which associated to the labor market segmentation, that is usually understood as a market imperfection). Among these attributes, it arises the status laboral (also called occupational status, in some related studies), the activity sector and the region. It will be investigated, furthermore, the importance of the presence of gender discrimination on the labor income determination.
Download
Labor market and social welfare
