Photo: Feliphe Schiarolli
brazil income inequality

Income inequality in Brazil is among the world’s highest. Photo: Feliphe Schiarolli

New research from the World Inequality Lab has confirmed Brazil’s place as one of the countries with the highest levels of income inequality. According to the report, the country’s richest 1 percent accounts for 27.8 percent of the country’s income, putting Brazil higher up the list than any other country measured. In comparison, Turkey has the second highest concentration of income on the list according to the study, but their richest 1 percent accounts for 23.4 percent of the national income.

The report comes from a team coordinated by French economist Thomas Piketty, and forms a part of the Laboratory’s database which maps the evolution of modern income inequality. In addition to having the highest concentration of income, the data also showed that Brazil’s millionaires collect more of their country’s income than in Middle Eastern countries.

Brazil’s richest 10 percent also held a significant share of the country’s wealth in comparison to other countries, coming joint second to the Middle East and sitting alongside India. The researchers cited Europe as an example of efficient wealth redistribution strategy, noting that smaller income disparities had developed since 1980 when compared to other regions.

However, researchers note that because each country collects this data differently, this could throw up different findings to those carried out by domestic surveys. Across the countries surveyed, WIL’s researchers based their findings on multiple sources including public accounts, income tax returns and tax data, wealth rankings, inheritances, family incomes and local search information.

In Brazil, they used 2016 data from the Continuous National Household Sample Survey (PNAD), compiled by the Brazilian Institute for Geography and Statistics (IBGE), along with other measures, as the basis of their research.

WIL researchers recommend implementing progressive taxation regimes to decrease inequality in countries like Brazil, along with more stringent measures to tackle tax evasion and increases to inheritance taxes.

This accompanies research released last month by IBGE, although different methodologies mean that IBGE’s own study calculated that Brazil’s richest 1 percent concentrate 23 percent of the country’s income, as opposed to 27.8%. IBGE’s study found that the average salary among the wealthiest 1 percent was 27,085 BRL per month, while the national average was 2,149 BRL. Men occupied 57.5 percent of all jobs and were paid approximated 22.9 percent more than women on average. Incomes of white workers were 30.8 percent higher than the national average, while black and mixed-race workers received 28.0 percent and 29.1 percent less respectively.

IBGE’s data also demonstrated the concentration of income within certain regions. The Southeast region, home to the states of Espírito Santo, Minas Gerais, Rio de Janeiro and São Paulo, accounted for both the largest share of total income, as well as concentrating the highest average incomes.

However, it also demonstrated the highest levels of inequality out of all of Brazil’s regions. Meanwhile, the Northeast region, composed of the states of Alagoas, Bahia, Ceará, Maranhão, Paraíba, Pernambuco, Piauí, Rio Grande do Norte, and Sergipe, showed the lowest difference between incomes, including both salaried jobs and informal employment.

You can access the full World Inequality Report here.

MoneyDec 15, 2017

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BY The Brazilian Report

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