Regional income convergence in Brazil and its socio-economic determinants

Abstract

This study looks at the evolution of real income per capita across states in Brazil to examine the question of whether regional divergence of income increased or diminished from 1939 to 1994. Robust evidences of per capita income convergence across states are reported under the conditional and the unconditional convergence hypotheses, although the speed of convergence was low. Socio-economic factors that may explain the differences in state performances are examined and indicate that human capital, investment in industry (and in infrastructure in general) induced growth while concentration of land property helped to deter growth.