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Purpose This paper investigates discrimination against women within the Brazilian labour market using firm-level data from the World Bank Investment Climate Survey. The purpose of this paper is to determine whether the female employees in the Brazilian labour market are paid less than their productivity warrants due to the existence of discrimination.Design/methodology/approach Based on employer discrimination model proposed by Becker (1971) that considered the proportion of female employees as a proxy for the extent of discrimination, the authors estimate the profit function using OLS analysis, and regress it on the proportion of female employees and other firm characteristics. To address the endogeneity problem caused by unobservable productivity shocks, the authors employed the methods proposed by Olley and Pakes (1996) and Levinsohn and Petrin (2003), respectively.Findings The results indicate that the proportion of female employees has positive effect on firms’ profit in 2002, but has no effect in 2007. This finding gives evidence of the existence of discrimination against female employees within the Brazilian labour market in the early 2000s, while the gender discrimination was reduced overtime.Originality/value This paper’s main contribution is to provide an approach that differs from that of previous research to determine whether discrimination exists within the Brazilian labour market. This paper also provides policy insights for Brazilian labour market. [ABSTRACT FROM AUTHOR]

Purpose – Most intergenerational mobility studies use data on two generations to estimate the elasticity between son's and father's earnings. The purpose of this paper is to use a data set spanning three generations to estimate additional relationships between a person's earnings and family background yielded by intergenerational mobility models such as Becker-Tomes (1979) model and modified versions of it. Design/methodology/approach – The paper uses data from the 1996 PNAD – a nationally representative household survey in Brazil. The author builds a data set consisting of 5,125 grandfather-father-son triplets by taking advantage of two characteristics of Brazil. First, commonly in Brazil, individuals live with their parents until they marry. Second, individuals tended to quit school and begin working at an early age. As a result, there are many households with adult sons who are not at the very beginning of their working careers. Since the sample is limited to households with adult sons, the author applies Heckman (1979) estimation procedure to address selection bias. Findings – Estimation results contradict some predictions of simple versions of the Becker and Tomes model. The paper proposes a modified version of the Becker and Tomes model that allows for a skipping generation effect, and finds that family background explains 34.9 percent of the variation in earnings among males aged 16-27 in Brazil. If there were no differences in endowments (talent, IQ, health, physical appearance, attitudes toward work, family connections, etc.), the variation in earnings would fall by no less than 26 percent. If it were possible to eliminate differences in investment in human capital, the variation in earnings would fall by at most 21.1 percent. Research limitations/implications – The paper has two main data limitations. First, the 1996 earnings of the fathers and sons are used as proxies for lifetime earnings although the transitory component of one-year earnings may be quite large, particularly at young ages. Second, in spite of the efforts to deal with the sample selection bias, the paper shows that the intergenerational elasticity in earnings for the sons aged 22-27 is about 14.6 percent lower for the subsample of households with adult sons than for the full sample. Practical implications – The paper finds evidence supporting the existence of a direct effect of the grandparents on the grandchildren beyond their influence on the parents, and reinforces consideration of this factor in intergenerational mobility studies. Social implications – The findings in this paper may suggest a room for improvements in economic outcomes of children in less privileged families through investment in formal education as well as policies that considers other aspects of a person's life. For instance, Bolsa Família – a Brazilian government program that provide cash allowances to poor families conditional on children school attendance – may improve the economic outcomes of poor children by enforcing formal education and by lessening the children hardships at home. Originality/value – The paper proposes a modified version of the Becker and Tomes model which allows for a skipping generation effect. Under the assumptions of the modified model and in hand with a three-generations data set from Brazil, the paper estimates a lowerbound for the variation in earnings explained by differences in endowments across families, and an upperbound for the variation in earnings explained by differences in human capital. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to estimate the impact of racial and low-income quotas on academic performance of students from public and private universities in Brazil.Design/methodology/approach Using propensity score matching applied to student-level data from the National Examination of Student Performance conducted in 2012; this paper identifies the impact of the quota policy on academic performance considering all Brazilian universities.Findings The results indicate that there is no statistically significant difference in academic performance between students admitted under the racial quota and those who had the regular admission (non-quota students). The impact is positive, however, for students from the North region of Brazil and among those with very low family income, whereas a negative impact is observed for those from the Central-West region. In regard to the low-income quota, quota students perform worse than eligible non-quota students as their scores are, on average, 14 percent lower. Similar findings are observed when different subsamples are considered.Originality/value This paper’s main contribution is to provide a broader and more rigorous empirical approach than that presented by the existing literature in order to evaluate the impact of quota policies on academic achievement. Moreover, this study considers all Brazilian institutions whereas previous studies are limited to only one or a few universities. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to investigate the hysteresis hypothesis for the price and quantity of Brazilian imports in recent years. Design/methodology/approach – The empirical measure of strong macro hysteresis, as developed by Piscitelli et al., was incorporated into import demand and pass-through panel cointegration equations. Findings – The results show that the number of sectors that do not reject hysteresis is larger for the import price than for the demand for imported goods. The evidence supports Dixit's idea that the presence of hysteresis should diminish the degree of pass-through. Correcting for hysteresis makes quantity and price of imports more sensitive to exchange rate variations. Originality/value – This paper contributes to the literature by introducing Piscitelli et al.'s measure to test the hysteresis hypothesis in import prices and quantity. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to present a theoretical model and empirically verifies the transmission of monetary policy through the credit channel in Brazil. The study verifies if the monetary policy, the economic activity and the maturity of the inflation targeting regime affect the supply of credit. Design/methodology/approach – The paper offers a review of the literature concerning inflation targeting credibility and the transmission mechanism of monetary policy through the credit channel, it develops a theoretical model based on Bernanke and Blinder and Ferreira and it seeks empirical evidence for the Brazilian economy using ordinary least squares, generalized method of moments and vector autoregressive. Findings – The estimates indicate that the supply of credit is stimulated when the economy heats up, when the monetary authority reduces the interest rate and when the credibility increases. The evidence also indicate that the supply of credit is affected by the variables of the model, economic activity and employment are affected by monetary policy and the supply of credit exerts influence on both employment and output gap. Research limitations/implications – An important implication of this study is that, in inflation targeting emerging economies, such as that of Brazil, following a committed monetary policy to price stability which increases the credibility of the regime of inflation targeting and promoting macroeconomic stability represents a good strategy for improving the volume of lending to the private sector, thus stimulating economic activity and employment. What the findings do indicate is that developing credibility is crucial for emerging economies that are trying to grow, but with inflation being kept under control. Originality/value – The paper presents the following theoretical and empirical contributions: the model incorporates the effect that the credibility of the inflation targeting regime has on the supply of credit and, the econometric approach provides evidence that the monetary policy, the economic activity and the process of anchoring of inflation expectations affect the supply of credit in Brazil. Moreover, the paper finds evidence that the credit channel acts as a transmission mechanism of monetary policy to the economy. [ABSTRACT FROM AUTHOR]

Purpose – The aim of this paper is to perform an evaluation of the Brazilian informal labor market, following the lines suggested by Araujo and Souza. The paper focuses on the Brazilian labor market by using data from the National Household Sampling Survey – PNAD/IBGE, from 1995 to 2008. Design/methodology/approach – The paper uses four different methodologies: the OLS, pseudo-panel with fixed effects, instrumental variables and the Heckman selection model. The data for this study were obtained at the National Household Sampling Survey – PNAD/IBGE, from 1995 to 2008, with an exception to the years of 1994 and 2000, when this survey did not occur. The cross-section data were pooled and divided in two periods: 1995-2002 and 2003-2008. The sample ranges individuals from 22 to 57 years of age. Findings – The empirical findings show that although wages play an import role in the decision of workers and firms, all wage gaps between formal and informal markets reduced considerably, as has been pointed out by Mattos and Ogura. However, an increase in one year of study would raise the probability of participating in the formal sector while diminishing the probability of joining the informal sector. Besides, the skill premium in the formal sector is higher than in the informal sector. Originality/value – Results indicate that the main difference between the 1995-2002 and 2003-2008 period is the impact of education over wages. Returns to education for the second period are greater than for the first period analyzed. The monetary gains for the first period vary from 16.5 to 18.2 percent for formality and from 12.2 to 14.3 percent for informal labor. Whereas, for the second period these gains range from 19.7 to 22.6 percent and from 16.9 to 18.2 percent, for formality and informality, respectively. According to these findings, investments made on education were more profitable for the 2003-2008 period. However, all wage gaps between formal and informal markets reduced considerably, which reinforces the fact that workers are increasingly deciding in which market to operate. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to see if a difference exists between the impact of the subprime crisis on countries with more transparency and more regulated finance than on others. A further objective is to explain the success of the Brazilian case in avoiding the financial crisis and to show empirical evidence for the presence of market discipline. Design/methodology/approach – The paper offers a regulation and transparency index (RTI) based on 37 countries. Considering RTI and stock market index of developed economies, BRICs economies, and developing economies, cross-country estimations are made. Furthermore, the analysis for market discipline in the Brazilian case is based on GMM panels, taking into account market discipline through subordinated debt holders (debentures). Findings – The results indicate that a higher degree of regulation and transparency is related to a higher return and a lower volatility in the stock market during the subprime crisis. Moreover, one of the main reasons for the apparent success of the Brazilian case in facing the crisis is the combination of a strong regulation of the financial system and the presence of market discipline. Practical implications – Transparency of information by the banking sector is relevant for the regulation of the financial system. Originality/value – The paper presents new insights for the literature on financial regulation and transparency of information in the search for a framework capable of avoiding financial crisis. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to analyse the relationship between infrastructure and total factor productivity (TFP) in the four major Latin American economies: Argentina, Brazil, Chile, and Mexico. Design/methodology/approach – The authors hypothesise that an increase in infrastructure has an indirect effect on output by raising productivity. To assess this theory, the traditional Johansen methodology was used for testing the cointegration between TFP and physical measures of infrastructure stock, such as energy, roads, and telephones. The Lütkepohl, Saikkonen and Trenkler Test, which considers a possible level shift in the series and has better small sample properties, was applied to the same data set and the two tests were compared. Findings – The results do not support a robust long-term relationship between the series; the authors do not find strong evidence that cuts in infrastructure investment in some Latin American countries were the main reason for the fall in TFP during the 1970s and 1980s. Originality/value – The present paper addresses the empirical relationship between infrastructure and economic growth for Argentina, Brazil, Chile, and Mexico between 1950 and 2000, using new time series econometric methods finding new evidences on this relationship. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to characterize that the marginal social cost of public funds and to estimate the response of labor supply to these publicly provided goods, and simulate the marginal social cost of cash-cum-in-kind transfers (MSCKT) for Brazil. Design/methodology/approach – The paper provides a theoretical model based on Wildasin to characterize the marginal social cost of public funds. Next it estimates using instrumental variables approach the variables necessary to calibrate our theoretical model. Findings – The marginal social cost of public funds depends on the relation between labor supply and the cash-cum-in-kind transfers. Last, the simulations suggest that MSCKT can increase up to 12.4 percent if compared with cases in which is assumed ordinary independence between labor and the bundle of goods provided by the public sector. Research limitations/implications – Further panel data experiments based on municipal public finance data should be conducted in order to circumvent the agents' heterogeneity problem inherent in cross section analysis – and individuals' labor supply response could be more sensitive at this data level. Finally, such cost-benefit analysis makes more sense when a specific project is considered and therefore its effects on the taxed good can be clearly estimated leading to a more reliable estimative of the marginal social cost of funding that project. Social implications – Governments should take the actual social cost of public policies into consideration before undertaking any new project. Originality/value – The paper is useful to characterize the marginal social cost of public funds, estimate the necessary parameters and, last, to calibrate its correspondent using Brazilian data. [ABSTRACT FROM AUTHOR]

Purpose -- The purpose of this paper is to analyze the influence of prudential regulation and monetary policies on the supply of credit as well as the influence of such policies on the aggregate investment through the credit channel in Brazil. Design/methodology/approach -- The empirical analysis is based on estimates through ordinary least squares (OLS), generalized method of moments (GMM), system of equations through GMM (system-GMM), and impulse response functions through vector autoregressive (VAR). Findings -- The results suggest that monetary policies and prudential regulation affect aggregate investment through the bank lending channel. With regards to elasticities, the findings indicate that the credit is very sensitive to variations in economic activity and, in turn, prudential regulation presents a stronger influence on credit than the basic interest rate and the reserve requirement rate. Moreover, the estimates suggest that aggregate investment is more sensitive to entrepreneurs' expectations and credit supply. Practical implications -- Aiming to reduce systemic risk in the economy, capital requirements may be increased in order to induce banks to a lower risk exposure by reducing the supply of loans. However, while this instrument strengthens the banking system, it can also lead the banking system to become less sensitive to monetary policy shocks, and also discourage aggregate demand through the influence that the credit exerts on investments. As a consequence, prudential regulation is an important tool because it acts on the balance between economic growth and low risk exposure of banks. Originality/value -- The paper provides useful insights to academicians, economists and policymakers who are interested in understanding the effects of monetary policies and prudential regulation on aggregate investment through the credit channel in an emerging economy under inflation targeting. Moreover, the paper develops a theoretical model in order to show the influence of different monetary policies, as well as the influence of prudential regulation on the supply of credit. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to analyze the influence of macroeconomic variables and economic policies on expectations and confidence of entrepreneurs. It provides an econometric analysis of the expectation transmission channel under inflation targeting in Brazil, emphasizing the effect of inflation targeting credibility on the business confidence of industrial entrepreneurs. Design/methodology/approach – Based on ordinary least square (OLS), generalized method of moments (GMM) and vector autoregression (VAR), the paper provides empirical evidence about the influence of inflation targeting credibility and macroeconomic policies on expectations and confidence of entrepreneurs and, as a consequence, on industrial production. Findings – The evidence for the Brazilian economy suggest that monetary and fiscal policies as well as the credibility of the monetary regime affect economic activity by their impact on expectations of entrepreneurs. Research limitations/implication – Development of macroeconomic stability is important to the expectations formed by entrepreneurs and, therefore, for industrial production. In particular, inflation targeting credibility stimulates industrial production, since it increases the confidence of entrepreneurs about the functioning of the economy and their businesses. Originality/value – The results suggest new insights about the influence of economic policies on the real side of the economy, pointing out that the conduct of economic policies in emerging countries with inflation targets are likely to affect the expectations of entrepreneurs and therefore their production decisions. [ABSTRACT FROM AUTHOR]

Purpose – This analysis seeks to deal with the emerging economies and to reveal that, if the fiscal authority is accountable with a policy that stabilizes the public debt/GDP ratio, the consequence is a low Treasury bond risk premium. Design/methodology/approach – Based on the purpose of this paper, a theoretical model is developed and empirical evidence through an autoregressive distributed lag (ADL) model, taking into account the Brazilian experience, is made. Findings – The findings denote that domestic variables are responsible for determining the risk premium. Moreover, a correct management of the public debt and the use of primary surplus targets make for a good strategy for promoting a fall in the Treasury bond risk premium. Practical implications – Primary surplus and public debt/GDP ratio can be used as important tools for mitigating the Treasury bond risk premium. Originality/value – The results of the paper give some new insights about the management of fiscal policy for developing countries. [ABSTRACT FROM AUTHOR]

Purpose-This article aims to analyze if the adoption of inflation targeting in Brazil contributed to an improvement in the conduction of monetary policy capable of increasing credibility and reducing inflation without an increase in the sacrifice rate. Design/methodology/approach-Considering the Brazilian experience, this article estimates, through GMM and VAR methods, the offsetting effects of a monetary policy change on the output-inflation and unemployment-inflation trade-offs. Findings-The findings denote that the disinflationary process implemented in Brazil, afterthe adoption of inflation targeting, is not associated with the emergence of the above-mentioned trade-offs. Furthermore, the development of credibility in the conduction of monetary policy is an important element responsible for the achievement of this result. Practical implications-Development of credibility is an important strategy for improving the conduction of the monetary policy. Originality/value-The results of the paper give some new insights about the conduction of monetary policy for developing countries, which have adopted inflation targeting. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to make an analysis of the Brazilian experience after the adoption of inflation targeting concerning the effects caused by the new practices of transparency and communication in the monetary policy. Design/methodology/approach – Changes in the financial market's expectations due to monetary policy actions are analyzed based on methodologies proposed by Cook and Hahn and Kuttner. Daily data from transactions in the interbank deposit futures market of the Securities, Commodities and Futures Exchange (BMF&BOVESPA) are used for the period July 1999-January 2009. Two sub-periods are also considered: the "maturation period" – the first phase of the effects caused by an increase in central bank transparency; and the "wisdom period" – the second phase in the financial market's perception regarding an environment with more transparency. Findings – The findings are in consonance with the idea that an increase in central bank transparency and communication improves the efficiency of expectations hypothesis of the term structure of interest rate and the anticipation of changes in the interest rate target. Originality/value – This study offers some new insights into how central bank communication improves the efficiency of the monetary policy for developing countries, which have adopted inflation targeting. [ABSTRACT FROM AUTHOR]

Purpose - The purpose of this paper is to examine the existence of skill differentiation between formal and informal labor markets. Design/methodology/approach - First, a theoretical model is developed under the assumption that concealment of production is increasingly costly for informal firms. Second, using data on the Brazilian self-employed economy, two methods are utilized to compare earnings in the formal versus the informal economy: propensity score and instrumental variable (IV) methods. For the IV estimations, state-level variables are used as instruments for individual's decisions. In addition, the effect of schooling on formality choice is analyzed. Findings - The theoretical model implies that more productive firms tend to operate formally and the proportion of workers employed by formal firms is larger for higher skilled workers. In the empirical analysis, it is found that formal firms are more productive than informal firms, controlling for workers' characteristics, and that higher workers' skill increase the probability of formal operation, as predicted by the theoretical model. Originality/value - The paper provides an original theoretical model of skill differentiation in labor markets and empirically evaluates the implications of the model. [ABSTRACT FROM AUTHOR]

Purpose — This paper seeks to investigate the role of income-inequality on the size of local government. Design/methodology/approach — First, the paper extends the model proposed by Meltzer and Richard, allowing for spatial interaction in the redistributive in-kind transfers from the local governments. Second, it estimates the determinants of the size in local government taking into consideration spatial dependence in the variables. Findings — This model points that the poorer the median voter is, the higher should be the level of local public expenditures, but the spillover effect (spatial effect) in spending is undetermined. Second, using data on Brazilian states public finance, the results suggest a negative relation between expenditures (and tax revenues) and the median voter income, in favor to the model. While both public spending and tax rates exhibit negative spatial correlation (substitute goods), behavioral significance can be attached to the spatial process in public spending but not to the spatial process in the local tax rate. Originality/value — The paper provides a small extension of the Meltzer and Richard model allowing for spatial interaction and contributes to the empirical debate about inequality and the size of the government presenting the results for Brazil. [ABSTRACT FROM AUTHOR]

The article investigates the existence of discrimination in the urban and rural labor markets in Brazil. Tests the hypothesis that returns to education are different for black and white workers, male and female, in the urban and rural sectors. The methodology used allows for the decomposition of the difference in the mean earnings of male and female workers in the urban and rural sectors in a share that can be explained by characteristics such as education, hours of work and experience, and in another share that reflects the existence of discrimination. The analysis is carried out with microdata from the National Household Surveys (PNADs) of 1992 and 1998. The choice of the period of analysis was made with the aim of investigating whether changes in the economic environment affect the standard of returns to education The results suggest the existence of strong discrimination by gender and race, besides the presence of substantial wage differentials between urban and rural workers. [ABSTRACT FROM AUTHOR]