A statistical interpretation of the IGP, of NHS e the minimum wage

Vol. 35 No. 1 (2015)

Jan-Mar / 2015
Published January 1, 2015
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Bacha, Edmar, and Rodolfo Hoffmann. 2015. “A Statistical Interpretation of the IGP, of NHS E the Minimum Wage”. Brazilian Journal of Political Economy 35 (1):64-74. https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/214.

A statistical interpretation of the IGP, of NHS e the minimum wage

Edmar Bacha
Sócio fundador e diretor do Instituto de Estudos de Política Econômica/Casa das Garças.
Rodolfo Hoffmann
Professor senior da ESALQ-USP
Brazilian Journal of Political Economy, Vol. 35 No. 1 (2015), Jan-Mar / 2015, Pages 64-74


Why has household income in the National Household Survey (PNAD) grown so much faster than household consumption in Brazil's GDP from 2011 to 2012? To provide an answer to this question, we start from a visualization of the importance of the minimum wage in PNAD's income distribution and from a hypothesis that the underestimation of incomes in the PNAD surveys is concentrated in those families whose incomes do not follow the minimum wage. We then derive an equation to explain the difference between household income growth in the PNAD and household consumption growth in the national accounts as a function of the change in the minimum wage. Our empirical estimates of this equation suggest that the behavior of the minimum wage has been an important component in the explanation of differences in income growth between the PNAD and the GDP accounts.

JEL Classification: D31.

Keywords: minimum wage national accounts income survey