Income Distribution and Social Expenditure in Brazil (Electronic book text)

Based on available country data, Brazil has one of the most unequal size income distributions in the world. In the early 1990s, Gini coefficients measuring the distribution of incomes per person for the economically active population (EAP) and for per-capita household income have been in the range of .60 (Table 1), compared with average Gini coefficients in South and East Asia of roughly .35-.39 during the 1960s-90s and .34 in the industrial and high income developing countries (Table 2). Other measures of income distribution also depict a high degree of inequality in Brazil compared to these country groups. For example, the ratio of the top 20 percent's share to the bottom 20 percent's share equaled 32.1 in 1989, compared with data complied by Deininger and Squire (1996) indicating an average of 5.5 in South Asia during the 1960s-90s and 6.3 in the industrial and high income developing countries during that time period. Income inequality is also high in Brazil relative to other Latin American nations, despite the fact that the region is generally characterized by a substantial degree of income inequality.2 The true extent of inequality in Brazil is most likely understated by the household survey data reported in Table 1, due to the underreporting of incomes in these surveys and the fact that much of the missing income is probably derived from capital incomes (rents, profits, and interest).3