The Effects of Age Composition on Income Inequality: The Brazilian Case

Andrea B. Simão, Federal University of Minas Gerais
Claudia Julia Guimaraes Horta, CEDEPLAR
Simone Wajnman, Princeton University

The Brazilian scenario presents three issues motivating the investigation of the effects of demographic changes on income inequality. First, since the late 1960s, Brazil has been experiencing one of the most impressive fertility declines among the developing countries and, as a consequence, it has been facing an accelerated aging process. Second, several studies debate the unequal distribution of wealth, power, and privileges. Third, the country has one of the worst and most persistent unequal income distributions worldwide and it may be directly related to changes in the country's the age structure. Using data from repeated cross-sections of a large Brazilian household survey (PNADs) from 1977 to 1999, this study analyzes the effects of a changing age structure on income inequality and the importance and effectiveness of public policies designed to reduce such inequality.