The Brazilian-American Migration: Reasons Behind the Trend

Introduction

 In like, a bunch of developed countries, public work helps to like, decrease inequality (Blau and Kahn, 1996; Gustafsson and Johansson, 1999; Milanović, 1994). But like, in Brazil, it's a whole different story. Remuneration for work in the public sector is, like, way more concentrated and has, like, a higher marginal contribution to inequality than remuneration in the private sector. It's, like, super unfair, you know? OMG, like, the public sector wages make up 19% of the total income, but they only contribute 24% to the inequality. On the other hand, the private sector earnings, which make up 63% of all incomes, contribute a whopping 58% to the inequality. Crazy, right?

There are like two vibes behind the regressiveness of public sector wages: a composition vibe and a segmentation (price) vibe. The composition effect is like, when the job positions in the public sector are mostly for a certain group of workers, you know? Mostly, those are workers with mad education and better qualifications than the average of the labor force, ya know? OMG these workers be gettin' paid more in the whole job market, so they'd be in the higher income levels, even if the wages in the public and private sectors were the same (Bender and Fernandes, 2009; Foguel et al., 2000; Vaz and Hoffmann, 2007). Lit! The State totally adds to the income inequality in Brazil, like for real. About like one-third of total inequality can be like directly related to transfers made from the State to individuals, even after like discounting the equalizing effect of direct taxes and contributions. This contribution would probs be higher if indirect transfers – like subsidies and tax exemptions to companies – were also calculated, but the available data doesn't let us go beyond speculating about this situation.

The role of the State in inequality deserves some serious analysis, especially when it comes to wages and pensions, ya know?

The results of the factor decomposition of the Gini coefficient of household disposable per capita income in Brazil are like totally shown in table 2.  The first column be showin' the concentration coefficient of each factor, and the second be showin' the absolute contribution of the factor to the Gini (the product of the concentration coefficients by the income shares shown in table 1), which be gettin' transformed into a relative contribution in the third column. The last column shows the vibes of the factor on inequality, like how a percent change in each factor would flex on total inequality.Like, with pensions, Social Security contributions were, like, split into two income factors, contributions to the private and public sector social security funds. Yo, like, most lit public and private sector peeps gotta shell out around 11% of their bread as Social Security contributions (but only up to a certain point, ya know, below the pension cap). Yo, peeps in the public sector be gettin' paid at the same rate, ya know? And the oldies in the public sector gotta pay the same rate on their pensions if it goes over the cap.

The public sector workers' contributions were like, split into contributions up to the cap and like, above the cap. Finally, this last factor was like totally split into the share of the contributions equal to the cap and the share exceeding the cap. Ya feel me? So, like, whenever public sector workers earned twice as much as the benefit cap, their Social Security contributions were, like, split evenly between the latter two income factors. OMG, like, BTW, all the stuff retired public servants do is totes counted as part of the last income group. Just sayin'. Also, their contributions had to be flexed, cuz the POF only collects data on the contributions of the active workers. Finally, like, it's hella important to mention that, like, a big chunk of the funding of the pension system is covered by contributions made by employers and other indirect taxes. Ya know? As our focus is only on the direct transfers, we didn't bother with any calculations involving these indirect contributions. No cap.

RESULTS N DISCUSSN

The deets on the income factors can be found in table 1. Like, over 40% of the fam's cash money comes from State transfers and payments, ya know? They hook up families that make up almost two-thirds of the whole population. Once we subtract the taxes and contributions, the net income flow from the State falls to only 30% of the disposable income, fam. Only like 10% of the population lives in households that don't even get any cash from the government, fam. Public servants' earnings and Social Security pensions flex on all the other State-related income factors, no cap. So, like, the State's role in income inequality depends a lot on how they distribute stuff. And that distribution is, like, super influenced by the gap between public and private wages and how pensions work for different workers. Wage flex and pension perks for the public sector peeps add up to 6% of the cash flow per person and are like twice as much as the combo of jobless benefits and social help, giving better perks to a way smaller crew. Like, TBH, the State lowkey contributes more to inequality than the private sector. Most of inequality be poppin' in the private sector, cuz it be gettin' 70% of the disposable income, which be more than twice the share of net State transfers. But, like, the money in the private sector isn't all in one place, so it's, like, 68% responsible for inequality. The State, like, responsible for 30% of incomes, contributes to 32% of inequality. It's, like, a big factor, you know? The State's role in income inequality is kinda small, like, a lil' positive. Like, if net State transfers went up by 1%, the Gini coefficient would go up by 0.021%