THE EFFECT OF THE SUGAR AND GOLD CYCLES ON WAGE INEQUALITY AND LABOR MARKET DISCRIMINATION IN BRAZIL

Abstract

This paper use data from the influence of the colonial sugar and gold cycles
in Brazilian municipalities to provide evidence of racial wage discrimination in the job
market in Brazil. This is done through three different empirical tests. The first replicates the test in Naritomi, Soares e Assunção (2012), using as the dependent variable
the wage gap between white and black men in Brazil to show the persistent effect of
extractive colonial institutions. The second is a traditional Mincerian estimation with
additional colonial origin variables. The third test is a Blinder-Oaxaca decomposition to
determine the proportional racial wage difference estimated for areas affected by different colonial cycles. Although discrimination has multiple complex causes, the results
show that at least in part there are historical origins.