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A dynamic model of education level choice: Application to brazilian states

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  • Maldonado, Wilfredo L.
  • Marques, Isabel M.
  • Filho, Osvaldo C. da Silva

Abstract

An empirical analysis of the education level / wage curve in the Brazilian states shows the S-shape of that function. When introducing that function in a dynamic programming problem of schooling choice, a non-concave problem arises and we may find multiplicity of stationary state equilibria. Some of them present local stability. This may explain the persistence of several education levels in the long run of the economy and as a consequence it results the poverty trap. We also analyze the sensitivity of the stationary states to changes in the education cost in order to evaluate the impact of public educational policies.

Suggested Citation

  • Maldonado, Wilfredo L. & Marques, Isabel M. & Filho, Osvaldo C. da Silva, 2012. "A dynamic model of education level choice: Application to brazilian states," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 66(2), June.
    • Handle: RePEc:fgv:epgrbe:v:66:y:2012:i:2:a:3050
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