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Human Capital Policies: What they Can and Cannot Do for Productivity and Poverty Reduction in Latin America

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  • Suzanne Duryea
  • Carmen Pagés

Abstract

Raising labor productivity is recognized as a critical factor for increasing economic growth and reducing poverty levels in Latin America. Low levels of education continue to be singled out as the main obstacle to higher productivity in the region. We examine the scope for education to lift labor incomes above poverty levels in Latin America and find that in many countries education, by itself, has a positive, but limited, potential to increase wages above a minimum level. In general, the prospects are dim because progress in raising average schooling levels has been slow even under the best historical scenarios. We also examine whether the apparent failure of education can be explained by low wage returns to schooling, and poor underlying conditions. We find that investments in education continue to have important payoffs but poor underlying conditions explain the modest prospect for the role of education in the short run. This leads us to consider what additional policies should be pursued in order to ensure higher productivity for workers in the region.

Suggested Citation

  • Suzanne Duryea & Carmen Pagés, 2002. "Human Capital Policies: What they Can and Cannot Do for Productivity and Poverty Reduction in Latin America," IDB Publications (Working Papers) 1103, Inter-American Development Bank.
  • Handle: RePEc:idb:brikps:1103
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pagés, Carmen & Stampini, Marco, 2009. "No education, no good jobs? Evidence on the relationship between education and labor market segmentation," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 387-401, September.
    2. Maldonado, Jorge Higinio & Gonzalez-Vega, Claudio & Romero, Vivianne, 2003. "The Influence Of Microfinance On The Education Decisions Of Rural Households: Evidence From Bolivia," 2003 Annual meeting, July 27-30, Montreal, Canada 22067, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Maldonado, Jorge H. & González-Vega, Claudio, 2008. "Impact of Microfinance on Schooling: Evidence from Poor Rural Households in Bolivia," World Development, Elsevier, vol. 36(11), pages 2440-2455, November.
    4. Maurice Kugler, 2006. "Migrant Remittances, Human Capital Formation and Job Creation Externalities in Colombia," BORRADORES DE ECONOMIA 003218, BANCO DE LA REPÚBLICA.
    5. Hernán Winkler, 2005. "Monitoring the Socio-Economic Conditions in Uruguay," CEDLAS, Working Papers 0026, CEDLAS, Universidad Nacional de La Plata.
    6. Carmen Pagés-Serra & Marco Stampini, 2007. "¿Sin formación no hay buenos empleos? Elementos de juicio sobre la relación entre la formación y la segmentación del mercado laboral," Research Department Publications 4562, Inter-American Development Bank, Research Department.
    7. World Bank, 2004. "Honduras : Investment Climate Assessment, Volume 2. Main Report," World Bank Other Operational Studies 14556, The World Bank.
    8. Suzanne Duryea & Olga Lucia Jaramillo & Carmen Pagés-Serra, 2003. "Los mercados laborales latinoamericanos en los años 90: descifrar la década," Research Department Publications 4332, Inter-American Development Bank, Research Department.
    9. Suzanne Duryea & Olga Lucia Jaramillo & Carmen Pagés-Serra, 2003. "Latin American Labor Markets in the 1990s: Deciphering the Decade," Research Department Publications 4331, Inter-American Development Bank, Research Department.
    10. Kundu, Amit & Mukherjee, Arghya Kusum, 2011. "Impact of Swarnajayanti Gram Swarojgar Yojona on health, education and women empowerment," MPRA Paper 33258, University Library of Munich, Germany, revised 01 Jun 2011.

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