12

Since the middle of the nineties, Brazilian minimum wage started a process of recovery of its real value. In the same period, the income distribution showed some improvement. The coincidence of these two results suggests that the increase of minimum wage would have contributed to the reduction of income inequalities in the country. With the objective to verify the contribution of minimum wage to the improvement of income distribution, this article explores data from Pesquisa Nacional de Amostra por Domicílios (PNAD) from 1995 to 2005, concentrating the analysis on the income from labor, official pensions and other official transfers, that together represent the great majority of the income data collected by PNAD. The various results obtained from simulations for the income distribution confirm the importance of minimum wage for the reduction of income inequalities in Brazil.