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Educational upgrading and returns to skills in Latin America: evidence from a supply–demand framework

Author

Listed:
  • Pablo Acosta

    (World Bank and IZA)

  • Guillermo Cruces

    (CEDLAS-FCE-UNLP (Centro de Estudios Distributivos, Laborales y Sociales–Facultad de Ciencias Económicas–Universidad Nacional de La Plata), CONICET (Comisión Nacional de Investigaciones Científicas y Tecnológicas)
    University of Nottingham)

  • Sebastian Galiani

    (University of Maryland)

  • Leonardo Gasparini

    (CEDLAS-FCE-UNLP (Centro de Estudios Distributivos, Laborales y Sociales–Facultad de Ciencias Económicas–Universidad Nacional de La Plata), CONICET (Comisión Nacional de Investigaciones Científicas y Tecnológicas))

Abstract

This paper documents the evolution of wage differentials and the supply of workers by educational level for sixteen Latin American countries over the period 1991–2013. We find a pattern of rather constant rise in the relative supply of skilled and semi-skilled workers over the period. Whereas the returns to secondary education fell over time, in contrast, the returns to tertiary education display a remarkable changing pattern common to almost all economies: significant increase in the 1990s, strong fall in the 2000s, and a deceleration of that fall in the 2010s. We conclude that supply-side factors seem to have limited explanatory power relative to demand-side factors in accounting for changes in the wage gap between workers with tertiary education and the rest.

Suggested Citation

  • Pablo Acosta & Guillermo Cruces & Sebastian Galiani & Leonardo Gasparini, 2019. "Educational upgrading and returns to skills in Latin America: evidence from a supply–demand framework," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 28(1), pages 1-20, December.
    • Handle: RePEc:spr:laecrv:v:28:y:2019:i:1:d:10.1186_s40503-019-0080-6
    DOI: 10.1186/s40503-019-0080-6
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    Cited by:

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    2. Bhalotra, Sonia & Fernandez Sierra, Manuel, 2018. "The distribution of the gender wage gap," ISER Working Paper Series 2018-10, Institute for Social and Economic Research.
    3. Sam Jones & Thomas Pave Sohnesen & Neda Trifkovic, 2023. "Educational expansion and shifting private returns to education: Evidence from Mozambique," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1407-1428, August.
    4. Kunst, David & Freeman, Richard B. & Oostendorp, Remco, 2022. "Occupational Skill Premia around the World: New Data, Patterns and Drivers," Labour Economics, Elsevier, vol. 79(C).
    5. Verónica AMARANTE & Rodrigo ARIM, 2023. "Inequality and informality revisited: The Latin American case," International Labour Review, International Labour Organization, vol. 162(3), pages 431-457, September.
    6. Francisco H G Ferreira & Sergio P Firpo & Julián Messina, 2022. "Labor Market Experience and Falling Earnings Inequality in Brazil: 1995–2012," The World Bank Economic Review, World Bank, vol. 36(1), pages 37-67.
    7. Manuel Fernández & Gabriela Serrano, 2022. "New Perspectives on Inequality in Latin America," Documentos CEDE 20295, Universidad de los Andes, Facultad de Economía, CEDE.
    8. Lebow, Jeremy, 2024. "Immigration and occupational downgrading in Colombia," Journal of Development Economics, Elsevier, vol. 166(C).
    9. Fernández, Manuel & Messina, Julián, 2018. "Skill premium, labor supply, and changes in the structure of wages in Latin America," Journal of Development Economics, Elsevier, vol. 135(C), pages 555-573.
    10. Puggioni Daniela & Calderón Mariana & Cebreros Alfonso & Fernández León & Inguanzo José A. & Jaume David, 2022. "Inequality, Income Dynamics, and Transitions of Mexican Workers," Working Papers 2022-14, Banco de México.
    11. Carlos Rodríguez‐Castelán & Luis Felipe López‐Calva & Nora Lustig & Daniel Valderrama, 2022. "Wage inequality in the developing world: Evidence from Latin America," Review of Development Economics, Wiley Blackwell, vol. 26(4), pages 1944-1970, November.
    12. Carlo Lombardo & Lucía Ramirez-Veira & Leonardo Gasparini, 2022. "Does the Minimum Wage Affect Wage Inequality? A Study for the Six Largest Latin American Economies," CEDLAS, Working Papers 0302, CEDLAS, Universidad Nacional de La Plata.
    13. Gustavo Canavire-Bacarreza & Luis C. Carvajal-Osorio, 2020. "Two Stories of Wage Dynamics in Latin America: Different Policies, Different Outcomes," Journal of Labor Research, Springer, vol. 41(1), pages 128-168, June.
    14. Leonardo Fabio Morales & Christian Posso & Luz A. Flórez, 2021. "Heterogeneity in the Returns to Tertiary Education for the Disadvantage Youth: Quality vs. Quantity Analysis," Borradores de Economia 1150, Banco de la Republica de Colombia.
    15. Lucía Ramírez Leira & Carlo Lombardo & Leonardo Gasparini, 2021. "The Effect of the Minimum Wage in Latin America's six largest economies," Asociación Argentina de Economía Política: Working Papers 4512, Asociación Argentina de Economía Política.
    16. Daniela Puggioni & Mariana Calderón & Alfonso Cebreros Zurita & León Fernández Bujanda & José Antonio Inguanzo González & David Jaume, 2022. "Inequality, income dynamics, and worker transitions: The case of Mexico," Quantitative Economics, Econometric Society, vol. 13(4), pages 1669-1705, November.
    17. Eréndira León Bravo, 2022. "Three essays on education, wages, and the labour market in Mexico," Economics PhD Theses 0322, Department of Economics, University of Sussex Business School.
    18. Sam Jones & Thomas Pave Sohnesen & Neda Trifković, 2018. "The evolution of private returns to education during post-conflict transformation: Evidence from Mozambique," WIDER Working Paper Series wp-2018-143, World Institute for Development Economic Research (UNU-WIDER).
    19. Sam Jones & Neda Trifkovic & Thomas Sohnesen, 2018. "The evolution of private returns to education during post-conflict transformation: Evidence from Mozambique," WIDER Working Paper Series 143, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Returns to skills; Latin America; Inequality; Education;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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