The Agricultural Wage Gap: Evidence from Brazilian Micro-data
Jorge A. Alvarez
- American Economic Journal: Macroeconomics (Forthcoming)
A key feature of developing economies is that wages in agriculture are below those of other sectors. Using Brazilian household surveys and administrative panel data, I use information on workers who switch sectors and workers with multiple jobs to assess the role of worker composition in explaining this gap. The evidence is consistent with the presence of significant inter-sector sorting in Brazil. A calibrated sorting model can account for the wage gap level observed as well as its decline as the economy transitioned out of agriculture.
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