BRASILIA, June 23 (Reuters) - Income inequality among Brazilians with jobs has narrowed, but the overall gap between rich and poor in Latin America''''s largest country may have widened since 2002, a government study showed on Monday.

Brazil has long been one of the world''''s least equitable societies with many of the rich living in walled-off villas and often spending more on their pets than on their domestic help.

Between the last quarter of 2002 and the first quarter of 2008, the gap between the highest and lowest salaries fell by nearly 7 percent, the government''''s Institute for Applied Economic Research (IPEA) said.

The Gini index, an international standard widely used to measure inequality, among employed people fell to 0.505 this year from 0.54 in 2002, the IPEA study showed. A rating close to zero shows high income distribution.

Increased social welfare programs and accelerated economic growth drove up bottom-end salaries faster and helped reduce income inequality, IPEA president Marcio Pochmann, told a news conference.

But the figures, which are based on official employment data, exclude the main source of income for the wealthy, such as capital or real estate gains. These grew faster during the Lula administration than salaries, the study showed.

Salaries accounted for 39.1 percent of national income in 2007, down from 39.8 percent in 2002.

In most industrialized countries salaries account for more than two-thirds of national income, Pochmann said.

It''''s a problem in all countries, these surveys don''''t include the rich, Pochmann told reporters.

Scandinavian countries have Gini ratings of around 0.25 while most western European countries lie around 0.35.

President Luiz Inacio Lula da Silva, a union leader during the 1970s, increased the minimum monthly salary above inflation and expanded welfare payments for the poor since taking office in January 2003.

Starting salaries for the top 10 percent of income earners averaged 4,853 reais ($3,008) in 2007, or 23.5 times the bottom 10 percent. In 2003, the wealthy earned 27.3 times more than the poor.

The economy has been growing above 5 percent, in one of Brazil''''s strongest economic expansions in decades.

The study was based on employment data in six major cities, which together account for 25 percent of Brazil''''s 180 million inhabitants and 37 percent of its gross domestic product.

IPEA was brought under direct control of the presidency after contradicting official economic growth forecasts early in Lula''''s administration.