We present evidence on intergenerational mobility of wages in Brazil using a large household survey. We estimate the wage elasticity coefficient through a two-sample instrumental variable procedure (Angrist and Krueger (1992) and Arellano and Meghir (1992)). We find that the degree of intergenerational mobility of wages in Brazil is lower than the one observed in developed countries. The degree of mobility varies across regions and racial groups. Our results also show that wage mobility has been increasing for younger cohorts. We also find evidence of significant nonlinearities in the mobility pattern in Brazil and that the intergenerational transmission of education is related to wage mobility in several ways.

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Brazilian PAYG system has been under financial stress and needs to be reformed. A computational general equilibrium model with 55 overlapping generations is used to simulate macroeconomic and welfare impacts of alternative social security reforms. Transition turns out to have quite different redistributional effects for the generations involved depending on which tax is used to finance it. There is no unanimity about which transitional tax path maximizes individual welfare. I study potential voting results if generations choose between the PAYG and a set of transitional schemes.

This paper surveys the literature on fiscal competition. We consider tax and expenditure competition in a more general set up where different jurisdictions within a federation may compete in the provision of public goods in order to attract some residents (Tiebout, 1956) and expel others (Brueckner, 1999); and/or for business. We address the vast literature on welfare gains or losses of these types of competition. Then, we discuss the empirical evidence, focusing on estimates of the sensitiveness of production factors to tax differentials and on the importance of the strategic interdependence among jurisdictions. We combine econometric studies with some case studies. Last we discuss the design of mechanisms to cope with fiscal competition, especially under a more global environment where factors become more mobile.