Is the Brazilian Tale of Peaceful Racial Coexistence True? Some Evidence from School Segregation and the Huge Racial Gap in the Largest Brazilian City

Brazil has always been considered to be a land free of racial and ethnic tensions. However, despite Brazil being famous for miscegenation, racial discrimination in Brazil has been documented in the literature, especially in light of the huge disparity between Brazil's racial groups with respect to economic outcomes and education levels. The objective of this paper is to contribute to a better understanding of the economics of racial discrimination in Brazil. To this end, the effect of segregation on the income of workers is estimated using data from elementary schools in São Paulo, the largest city in the country. Measures of segregation in the educational system are evaluated using economic data obtained from the 2010 census. It is shown that segregation plays a fundamental role on the wage gap among racial groups. This effect may be attributed to the virtual absence of pretos and pardos in private schools. In public education, however, there is little separation along racial lines, which suggests that lack of access to social networks and to higher quality public schools may be the most important element in explaining wage differences. In Brazil, racial discrimination seems to work indirectly through socio-economic factors.