This chapter studies the role played by labour market outcomes and education as well as by income policies on the level and distribution of household per capita income in Brazil between 1992 and 2009. It shows a pronounced reduction in overall income inequality since 2001 due
to social programmes and especially to labour improvements. The attractive feature of targeted social programmes, such as Bolsa Familia, is that in terms of GDP they cost much less than social security payments. Trends in years of schooling suggest that the decrease
in income inequality observed during this decade will continue in the coming years. The 2008‐09 international economic crisis has hit all earnings indicators, but by September 2009 they had once again reached pre‐crisis levels.