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Education Quality and Returns to Schooling: Evidence from Migrants in Brazil

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  • Luiz Mário Brotherhood
  • Pedro Cavalcanti Ferreira
  • Cezar Santos

Abstract

We provide a new education quality index for states within a developing country using 2010 Brazilian data. This measure is constructed based on the notion that the financial returns obtained from an additional year of schooling can be seen as being derived from the value that market forces assign to this education. We use migrant data to estimate returns to schooling of individuals who studied in different states but work in the same labor market. We find very heterogeneous educational qualities. In fact, Brazil displays cross-state educational quality variation almost as great as that observed across countries. We compare our index with standardized test scores, educational outcome variables, and public expenditure per schooling stage at the state level, producing new evidence related to education in a large developing country. We conduct an education quality–adjusted development accounting exercise for Brazilian states and find that human capital accounts for 26%–31% of output per worker differences. Adjusting for quality increases human capital’s explanatory power by 60%.

Suggested Citation

  • Luiz Mário Brotherhood & Pedro Cavalcanti Ferreira & Cezar Santos, 2019. "Education Quality and Returns to Schooling: Evidence from Migrants in Brazil," Economic Development and Cultural Change, University of Chicago Press, vol. 67(3), pages 439-459.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/698314
    DOI: 10.1086/698314
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    Cited by:

    1. Ricardo Nogales & Pamela Córdova & Manuel Urquidi, 2020. "The impact of university reputation on employment opportunities: Experimental evidence from Bolivia," The Economic and Labour Relations Review, , vol. 31(4), pages 524-542, December.
    2. Campbell, Susanna G. & Üngör, Murat, 2020. "Revisiting human capital and aggregate income differences," Economic Modelling, Elsevier, vol. 91(C), pages 43-64.

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