Brazil is the fifth largest country in the world and also the largest nation in South America with 206.1 million populations. Brazil covers nearly half of the continent with 3,286,470 square miles. Brazil is a Portuguese-speaking country consisting of 26 states. It borders with every countries on the continent except Chile and Ecuador. Brazil has one of the highest levels of income inequality in the world. Even the trend has been decreasing, the number of inequality from Gini index still reflects the crucial problem of income distribution in the country. Gini index has been slightly increased since 1980 to approximately 1989, it had a sudden drop to the lowest (almost 50) and started to rise after then and decreased gradually.
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The reason behind is the increasing regional inequality which is income differences amongst different regions in a country , rising in returning to level of education (leading to wage-skill premium), inequality in enhancing policy reforms, failure of developing the agricultural sector where majority people is poor . After that in 1980s, the increase in inequality was impact by rising in educational inequality. After 1993, the Brazil’s Gini index has been gradually decreasing over time until now by many efforts of the government which will be mentioned as following. Government increased the minimum wage in order to distribute income to the poors. In 1998, government reduced the minimum age for entitlement to the old-age pension system from 70 to 65 years old, which redistribute the income to the older people with lower income. Moreover, the government tried to redistribution the income by put the burden of income taxation (96 percent) mainly on the household of the richest 20% which greater than their share of income (60 to 70 percent). In 2003, the 35th president of Brazil, Lula da Silva announced the policy “Bolsa Familia Program” which is the conditional cash transfer program which transfers are made to poor household in order to provide a children to get more opportunity in attending school,
The reason behind is the increasing regional inequality which is income differences amongst different regions in a country , rising in returning to level of education (leading to wage-skill premium), inequality in enhancing policy reforms, failure of developing the agricultural sector where majority people is poor . After that in 1980s, the increase in inequality was impact by rising in educational inequality. After 1993, the Brazil’s Gini index has been gradually decreasing over time until now by many efforts of the government which will be mentioned as following. Government increased the minimum wage in order to distribute income to the poors. In 1998, government reduced the minimum age for entitlement to the old-age pension system from 70 to 65 years old, which redistribute the income to the older people with lower income. Moreover, the government tried to redistribution the income by put the burden of income taxation (96 percent) mainly on the household of the richest 20% which greater than their share of income (60 to 70 percent). In 2003, the 35th president of Brazil, Lula da Silva announced the policy “Bolsa Familia Program” which is the conditional cash transfer program which transfers are made to poor household in order to provide a children to get more opportunity in attending school,