Sergio Firpo and Alysson Portella. Decline in Wage Inequality in Brazil: A Survey such as the diminishing real value of the minimum wage are also partially responsible for increasing inequality in the lower tail of the wage distribution (Autor et al., 2016).

While inequality has risen in the developed world, Latin America experienced a much welcomed decline in inequality during the 2000s, at the same time that growth rates were high. In the period, household income inequality decreased in 16 of 17 countries in the region, and the bulk of the decrease was due to reduction in wage inequality (Messina and Silva, 2017). This decrease was concomitant to large increases in the relative supply of skilled workers and a reduction in skill premia. At the same time, the region, particularly South America, was hit by a large commodity boom, leading to increased demand, better terms of trade, and currency appreciation. Real minimum wage also increased in most of the countries in the region, which may have contributed to declines in wage dispersion. Many studies have tried to make sense of this phenomenon, pointing to all of these factors as contributing to the overall decline in the region (L ́opez-Calva and Lustig, 2010; Gasparini et al., 2011; Lustig et al., 2013; de La Torre et al., 2015; Messina and Silva, 2017).

The trends observed in Latin America also took place in Brazil, although in different levels and periods. The country once labeled by the historian Eric Hobsbawn as “the world contender for the championship of economic inequality”(Hobsbawm, 1995, page 407) experienced an unambiguous and continuous reduction in inequality in the first decade of the 21st century. The Gini coefficient for household income _per capita_ was stable around 0.6 between 1993 and 2001, when it started to decline steadily, reaching 0.527 in 2013 (Messina and Silva, 2017). According to Rodr ́ıguez-Castel ́an et al. (2016), in contrast with overall trends in Latin America, both labor and nonlabor income contributed equally to this drop. During this period, Brazil experienced a fast increase in coverage and volume of public social spending, via conditional cash transfers (the _Bolsa Fam ́ılia_ ), pensions, and other social security benefits, which were highly inequality-reducing (Barros et al., 2010).

Reductions in wage inequality in Brazil started earlier than the overall decrease in household income inequality, and earlier than the decrease in wage inequality observed in other Latin American countries, beginning soon after the inflation stabilization in 1994 and continuing after that, with an acceleration in the 2000s. In fact, between 1993 and 2003 Brazil experienced the fastest annualized reduction in wage inequality among Latin American countries, going from a Gini coefficient of 0.544 in 1993 to 0.52 in 2001, while the majority of the region was experiencing rising or stable inequality (Messina and Silva, 2017). When other countries in the region started to exhibit declining inequality, Brazil experienced an acceleration in its trend. The Gini coefficient for the wage distribution in Brazil went from 0.50 in 1995 to 0.41 in 2012, an impressive decrease of 18% (Ferreira 3