Declining inequality in Brazil in the 2000s: what is hidden behind?

Ever since the late 1990s, personal income inequality has shown a steady decrease in Brazil. Most of the investigations dealing with this issue rely essentially on summary measures of inequality, which may not capture all the relevant aspects of income distribution. Using the Pesquisa Nacional por Amostra de Domicílios data for 2001–2012, this paper applies "relative distribution" methods to analyse changes that have occurred along the entire Brazilian household income distribution. Despite substantial reduction in inequality, we are able to document also increasing income polarization, especially by the mid-2000s. Similar patterns are detected for different socio-economic groups defined by covariates measured on the households.