What Do Interindustry Wage Premiums Represent?

The aim of this paper is to investigate wage structure in Brazil between 2002 and 2015 based on National Household Surveys (PNADs). Given the nature and simultaneity of economic changes in the assessed period, as well as their potential impacts on the labor market, it is reasonable to assume that, despite the stylized fact that wage structure is quite stable, there have been non-negligible changes in the structure of relative wages. First, the labor market has become highly segmented and complex. Second, changes in wage structure have been observed. Relative wages in some sectors have increased, whereas relative wages in other sectors have decreased, suggesting a tendency towards resource allocation to sectors. There are remarkable potential impacts on income and on labor. Sectors that stand out include petroleum and alcohol, mineral extraction, and civil construction. However, if indirect effects are taken into account, via value chains, the petroleum and civil construction sectors have a major contribution. Fund transfers to these sectors would increase good-quality jobs, productivity, and economic value added. Aside from these changes, the international economy has been put through profound transformation (e.g., financial crisis, changes in relative prices), which has affected the sectors unevenly.