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Growth and Inequality in India
and Brazil
Cebrap-IHD project on Labour
Market Inequality in Brazil and India
December 2013
Gini Coefficient of Household Income (Brazil) and Household
Expenditure (India), 1993 - 2009
Growth and inequality in India and Brazil
2
Theil index, earnings, Brazil and India
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
1999
2004
2009
India
2011
Brazil
Growth and inequality in India and Brazil
3
Comparative analysis
• Quantitative cross-section
– Using national sample surveys to investigate patterns of
inter-household inequalities in consumption/income or
interpersonal inequalities in earnings
– Key dimensions education, sex, caste, race, gender, region,
sector
– Earnings functions and decompositions
• Historical-institutional
– Pattern of growth and employment
– Segmentations, class structures and structural divides
– “Growth, accumulation and distribution regimes”
Growth and inequality in India and Brazil
4
Pattern of change in Real GDP (per capita) and Real Wages
(Regular workers) in India from 1993-94 to 2009-10
250
200
150
Real GDP (per capita)
Rural Regular workers
Urban regular workers
100
50
0
1993-94
1998-99
2004-05
Growth and inequality in India and Brazil
2009-10
5
Pattern of change in Real GDP ( per capita) and Real Wages
(Casual Workers) in India from 1993-94 to 2009-10
250
200
150
Real GDP (per capita)
Rural casual workers
Urban casual workers
100
50
0
1993-94
1998-99
2004-05
Growth and inequality in India and Brazil
2009-10
6
Pattern of change in Real GDP (per capita) and Real
Wages in Brazil from 1995 to 2009
130
120
110
100
Real GDP (per capita)
Real Wage of Registered Workers
90
Real Wage of Unregistered Workers
80
70
60
1995
1996 1997
1998 1999
2001 2002
2003 2004
2005 2006
2007 2008
Growth and inequality in India and Brazil
2009
7
Pattern of Wage Share in India for Organized
Sector Workers, 1981-2010
0.70
0.60
0.50
0.40
Profit/Net Value Added
Rent+Interest/Net Value Added
0.30
Emolument/Net Value Added
0.20
0.10
Growth and inequality in India and Brazil
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
1998-99
1997-98
1996-97
1995-96
1994-95
1993-94
1992-93
1991-92
1990-91
1989-90
1988-89
1987-88
1986-87
1985-86
1984-85
1983-84
1982-83
1981-82
0.00
8
Functional distribution of income,
Brazil, 1995 to 2009
Growth and inequality in India and Brazil
9
Earnings inequality and work status (Theil indices)
1999
2004
2009
2011
India (regular and casual workers)
Rural
Total inequality
.37
.37
.30
.28
Within
.22 (61%)
.25 (68%)
.21 (70%)
.21 (76%)
Between
.14 (39%)
.11 (32%)
.08 (30%)
.06 (24%)
Urban
Total inequality
Within
.40
.32 (82%)
.44
.37 (86%)
.46
.38 (83%)
.45
.39 (88%)
Between
.07 (18%)
.06 (14%)
.07 (17%)
.05 (12%)
Brazil (registered and unregistered workers)
Total inequality
0.65
0.62
0.58
0.54
Within
0.50 (77%)
0.53 (85%)
0.50 (86%)
0.47 (88%)
Between
0.15 (33%)
0.10 (15%)
0.08 (14%)
0.06 (12%)
Growth and inequality in India and Brazil
10
Earnings inequality by caste (India)
and race (Brazil) (Theil indices)
1999
2004
2009
2011
Total Inequality
0.359
0.424
0.432
0.430
Within
.342 (95%)
0.396 (93%)
.412 (95%)
.405 (94%)
Between
.017 (5%)
.028 (7%)
.020 (5%)
.025 (6%)
Total Inequality
0.178
0. 152
0.120
0.129
Within
.172 (97%)
.149 (98%)
.117 (98%)
.126 (98%)
Between
.006 (3%)
.003 (2%)
.003 (2%)
.003 (2%)
Total Inequality
0.650
0. 624
0.580
0.537
Within
0.592 (91%)
0.576 (92%)
0. 544 (94%)
0. 504 (94%)
Between
0.058 (9%)
0. 048 (5%)
0.037 (6%)
0.032 (6%)
INDIA: Caste
Regular workers
Casual Workers
BRAZIL: Race
Regional inequality of expenditure (India)
and income (Brazil) (Theil indices)
1999
2004
2009
2011
India (expenditure)
Total
.19
.23
.26
.26
Within
.16
(88%)
.20
(88%)
.23
(87%)
.22
(85%)
Between
.02
(12%)
.02
(12%)
.03
(13%)
.04
(13%)
Total
0.79
0.65
0.58
0.55
Within
0.71
(90%)
0.60
(92%)
0.54
(93%)
0.51
(93%)
Between
0.08
(10%)
0.05
(8%)
0.04
(7%)
0.04
(7%)
Brazil (income)
Growth and inequality in India and Brazil
12
Growth and distribution regimes
– 1930s/1940s until around 1980
• India: State-led planning and investment, import substitution and
slow growth, some state action to limit inequality but
development of dualist labour markets
• Brazil: State-capitalist alliance, growth of middle class, import
substitution, period of high growth, eventually suppression of
labour and growing inequality
– 1980s to today
• India: external and internal liberalization, diminishing economic
role of state, weakening of labour institutions, high growth but
limited creation of good jobs
• Brazil: external and internal liberalization leading to economic
crisis, high unemployment, but reregulation after 2002 with revival
of labour institutions and stronger social policy
Growth and inequality in India and Brazil
13