Determinantes regionais de desigualdade de renda no Rio Grande do Sul, 2000-2010

Abstract

This studys goal is to identify those factors that define wage disparities between individuals from different cities in the State of Rio Grande do Sul, Brazil, by splitting the factors relative to individual attributes from those relative to their cities attributes. The theory points out that - besides different individual characteristics between workers individuals working localitys different labor market structures, agglomeration economies, level of centrality within the urban network, and historical-institutional characteristics are amongst the responsible variables for their wage disparities. The present work uses micro data from the 2000 and 2010 Demographic Census of Brazil, using HLM (hierarchical linear model) with fixed effects, that allows splitting the variance within-groups (individuals) from variance between-groups (cities), using hourly-wage as the dependent variable. The results suggest that agglomeration economies do exist, as city population is found to have significant and positive effect on wages, as urbanization/Jacobs economies, with proportion of productive services also significant and positive as explanatory variable in 2000 but only significant at 10% in 2010. Human capital externalities in cities, as proportion of those with college degree among workers, are also found to be significant and positive, although only at 10% in 2000. Localization/MAR economies, represented by proportion of the citys industrial jobs on the States industrial jobs, were not significant. Centrality variables relative to place in the urban network as taken from REGIC are found not significant in 2000, and significant and negative in 2010, contrary to expectations. Distance from the city to Porto Alegre (State Capital and its main economic/population center) is found to be significant and negative in both periods, as expected. Some mesorregional dummies are significant, suggesting that other regional factors possibly historical-institutional differences between regions are also determinants of wage inequality.