Sectoral structure of production and interpersonal income distribution in the northeast of Brazil in 2004

Abstract

A considerable levels of poverty and income inequality is a consequence of the sectoral structure of production and employment and how the income is used, doing that not all sections of the population to benefit from economic growth. This study evaluates how these structural aspects of the economy of the Northeast may affect how changes in the economy are manifested on interpersonal income inequality in the region. For this, we used the model of Leontief-Miyazawa employing the array of 2004 regional input-output and PNAD and POF data. The results indicate that households located in the lower income classes are those that generate more income in the economy after a shock in exogenous income, but are absorbing less, there is a trend of income induced concentrate on higher income groups. As for the productive sectors, after the shock in his hypothetical demand, only nine out of a total of 24 sectors, improve the Gini index. Finally, the results indicate that changes in the production structure observed between 1997 and 2004 in the Northeast helped to improve the distribution of income in the region.