Labor income inequality declines in 2021, points out IPEA survey

The return of unregistered private workers to the market last year helped reduce wage inequality in the country, according to a study released this Monday (14) by the Institute for Applied Economic Research (IPEA), linked to the Ministry of Economy.

The research also shows that the phenomenon led to a reduction in the average income of Brazilian workers, which fell by 10.7% in the same period.

According to the work “Portrait of earnings and hours worked during the pandemic”, the Gini indicator, which measures inequality, fell from 0.507 in the fourth quarter of 2020 to 0.490 in the same period last year. In this index, the closer to one, the greater the inequality.

The IPEA study points out that the average habitual income went from the peak of BRL 2,857, reached in the moving quarter ended in July 2020, to BRL 2,447 in the last quarter of 2021: the lowest in the historical series of the National Household Sample Survey (PNAD) Continuous.

The fall, according to the agency, intensified as informal and self-employed workers returned to the labor market, from which they had withdrawn due to restrictions imposed by the Covid-19 pandemic and which mainly affected the commerce and services sectors. .

For Ipea, this drop represents an indication of a return to normality in the labor market, although usual income is still below pre-pandemic levels.

The survey also shows that the proportion of households without income from work, which reached 28.04% in the third quarter of 2020, to 22.2% in the last quarter of last year. Numbers closer to the 2019 level: 21.5%.

The study also shows that the highest income growth, by household income range, was concentrated in the lowest income households in 2020.

In 2021, those with higher incomes showed a greater proportional reduction. In the fourth quarter of last year, the losses were 3.15% in the lowest-income households, while those in the two highest income brackets had smaller losses: 1.7% and 1.27%.