Inequality in Brazil

Why Brazil has among the world's highest income inequality, how it fell in the 2000s, and the roles of education, land, taxes and history.

Brazil has long been one of the world’s most unequal countries.

Measures

Brazil’s Gini coefficient has been around 0.50 to 0.55, among the highest globally.

Causes

History of slavery; Brazil abolished slavery only in 1888, the last in the Americas.
Land concentration in large estates.
Education gaps between rich and poor.
Regressive taxes: heavy reliance on consumption taxes.
Racial inequality.

The 2000s fall

Inequality fell in the 2000s due to:

Bolsa Família.
Minimum wage increases.
Education expansion.
Commodity boom jobs.

Setbacks

The 2015-16 recession and pandemic slowed progress.

Tax reform

In 2023, Brazil passed a major consumption tax reform, replacing several taxes with a VAT system, phased in over years. It also debated taxing the super-rich.

Comparison

India also has high inequality, especially in wealth, though its income Gini (based on consumption) is lower.

The favela and the high-rise

In Rio, a luxury apartment tower overlooks a favela, where residents earn a fraction of their neighbours' incomes.

Thinking inequality can't fall

Brazil's inequality fell in the 2000s through policy and growth.

Key takeaways

Brazil's Gini is among the world's highest.
Slavery, land concentration and education gaps drive inequality.
Inequality fell in the 2000s.
A major tax reform passed in 2023.