In the last decades, Brazil experienced a historical decline in its wage inequality level, particularly in the first decade of the 21^st century. This paper reviews the literature that attempted to explain the observed pattern. It considers mechanisms related to the supply and demand for labor,...

This paper argues that labor supply elasticities encode information about the determinants of income inequality. In the theoretical framework, individuals choose labor supply conditional on productivities and preferences for consumption relative to leisure. The paper shows that reduced-form...

Over the last two decades, Mexico has experienced macroeconomic stability, an open trade regime, and substantial progress in education. Yet average workers' earnings have stagnated, and earnings of those with higher schooling have fallen, compressing the earnings distribution and lowering the...