Why is Brazil so unequal Looking at the bare numbers in the preceding subchapter the question arises what could possibly be the reasons for Brazil's enormous inequality. Income in- equality exists because people differ in all kind of aspects that are relevant to the income they achieve. What usually contribute most to income inequality are differences in huluan capital, i.e. education Those differences in humau capital will result in different returns on the labour market. The more unequal the distribution of human capital and the higher the return to educa- tion, i e. a skill premium, the more unequal will also the income be distributed. Skill premiums are driven by supply and demand on the labour tnarket and on productivity a worker can achieve (Weil, 2012). However, income inequal ity can also have different sources: there can be geographical diferences, eg.