Publication: Are dictatorships more unequal? : economic growth and wage inequality during Portugal's estado novo, 1944-1974
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2008-05
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Abstract
This paper relates the changes in the structure of the Portuguese economy to
changes in wage inequality, during 1944-1974, when Portugal had its golden
age of growth under a dictatorial regime. We present a new wage data set
based on surveys conducted by the Portuguese Statistics Office (INE). Our data
set covers the whole economy, including 16 sectors, and data on skilled and
unskilled labor for manufacturing, and on male and female labor force for
agriculture. To measure the evolution of wage inequality we estimate a Theil
index. The results reveal an inverted-U curve with a peak in 1959. We proceed
by estimating econometrically the relationship between wage inequality and per
capita income growth, controlling for the influence of additional variables that
capture the effects of industrialization, investment in human and physical
capital, emigration, foreign trade and the size of the government. We find a
significant relationship between wage inequality, real GDP per capita, human
capital and the share of government spending.
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Wage inequality, Structural change, Portugal