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Education, earnings, and inequality in Brazil, 1982-98 - implications for education policy

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Author Info

  • Blom, Andreas
  • Holm-Nielsen, Lauritz
  • Verner, Dorte

Abstract

The educational attainment of Brazil's labor force, has gradually increased over the past two decades. At the same time, the government has pursued a series of economic structural adjustment policies. The authors investigate how these simultaneous advances have altered the relationship between labor market earnings, and education. They find that the returns to education in the labor market, fundamentally changed between 1982, and 1998. While the returns to tertiary education increased sharply, the returns to primary education dropped by 26 percent, and those to lower secondary, by 35 percent. Moreover, the authors argue, the marginal reduction in wage inequality that occurred in this period was linked primarily to a reduction in the returns to schooling, and only secondarily, to a more equitable distribution of schooling. The findings suggest that the supply of highly skilled labor is inadequate to meet demand. That suggests a need for policy action aimed at increasing access to, and completion of tertiary education. Increasing the supply of highly skilled labor, would improve prospects for both economic growth, and reduce wage inequality.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2686.

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Date of creation: 31 Oct 2001
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Handle: RePEc:wbk:wbrwps:2686

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Related research

Keywords: Public Health Promotion; Curriculum&Instruction; Decentralization; Teaching and Learning; Health Monitoring&Evaluation; Teaching and Learning; Curriculum&Instruction; Gender and Education; Health Monitoring&Evaluation; Girls Education;

References

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  1. Fiess, Norbert M. & Verner, Dorte, 2004. "The dynamics of poverty and its determinants - the case of the Northeast of Brazil and its states," Policy Research Working Paper Series 3259, The World Bank.
  2. Behrman, Jere R & Birdsall, Nancy, 1985. "The Quality of Schooling: Reply," American Economic Review, American Economic Association, American Economic Association, vol. 75(5), pages 1202-05, December.
  3. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(3), pages 410-42, June.
  4. Robbins, Donald & Gindling, T H, 1999. "Trade Liberalization and the Relative Wages for More-Skilled Workers in Costa Rica," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 3(2), pages 140-54, June.
  5. Kevin M. Murphy & W. Craig Riddell & Paul M. Romer, 1998. "Wages, Skills, and Technology in the United States and Canada," NBER Working Papers 6638, National Bureau of Economic Research, Inc.
  6. Francis Green & Andy Dickerson & Jorge Saba Arbache, 2000. "A Picture of Wage Inequality and the Allocation of Labour Through a Period of Trade Liberalisation: The Case of Brazil," Studies in Economics, Department of Economics, University of Kent 0013, Department of Economics, University of Kent.
  7. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, Econometric Society, vol. 46(1), pages 33-50, January.
  8. Dan T. Rosenbaum, 2000. "Ability, Educational Ranks, and Labor Market Trends: The Effects of Shifts in the Skill Composition of Educational Groups," JCPR Working Papers, Northwestern University/University of Chicago Joint Center for Poverty Research 146, Northwestern University/University of Chicago Joint Center for Poverty Research.
  9. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 30(3), pages 1333-81, September.
  10. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
  11. Neri, Marcelo Cortes & Camargo, José Márcio, 2002. "Distributive Effects of Brazilian Structural Reforms," Economics Working Papers (Ensaios Economicos da EPGE) 467, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  12. Adrian Wood, 2002. "Globalization and wage inequalities: A synthesis of three theories," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 138(1), pages 54-82, March.
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Cited by:
  1. Aysit Tansel & Fatma Bircan, 2010. "Wage Inequality and Returns to Education in Turkey: A Quantile Regression Analaysis," ERC Working Papers, ERC - Economic Research Center, Middle East Technical University 1003, ERC - Economic Research Center, Middle East Technical University, revised Dec 2010.
  2. Justesen, Michael, 2008. "Is the window of opportunity closing for Brazilian youth? Labor market trends and business cycle effects," Social Protection Discussion Papers 47188, The World Bank.
  3. Tushar Agrawal, 2011. "Returns to education in India: Some recent evidence," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2011-017, Indira Gandhi Institute of Development Research, Mumbai, India.
  4. Lorel Benoit, 2008. "Assessing Brazilian Educational Inequalities," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 62(1), pages 31-56, September.

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