Income gap between service and industry sectors in Brazil: a decomposition analysis

Abstract The objective of this study was to analyze the income differential between the service and industry sectors in Brazil based on the PNADs for the years 2004, 2009 and 2014. First, the wage gap was analyzed between the sectors mentioned using the decomposition by Oaxaca and Blinder, followed by an analysis employing the RIF (Recentered Influence Function) regression method. The results suggest that in the average wage decomposition the wage gap remains favorable to service sector workers in the three years analyzed. However, the analysis of quantiles indicated that the income differentials between sectors was more favorable to the services sector between 2004 and 2014 for the 75th and 90th quantiles of the distribution. In the lower quantiles, however, these differentials were more favorable to the workers in the industry sector.