Texto para Discussão, Instituto de Pesquisa Econômica Aplicada (IPEA) 1876
The study examines a particular set of institutional determinants of inequality, the public pensions. It tests the hypothesis that different rules regarding a maximum limit for the value of benefits in the pension subsystem of public and private sector workers makes the system as a whole regressive and contributes disproportionately to inequality in Brazil. Using a factor decomposition of the Gini coefficient of the distribution of family per capita income, as measured by POF 2008-2009 it concludes that the State reproduces pre-existing inequalities when it differentiates rules for public and private sector workers. Due to this differentiation of rules, the higher value pensions of less than 1% of the population contributes to 4% of total inequality.