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Skill Premium, Labor Supply and Changes in the Structure of Wages in Latin America

Listed author(s):
  • Fernandez Sierra, Manuel

    ()

    (University of Oxford)

  • Messina, Julián

    ()

    (Inter-American Development Bank)

Earnings inequality declined rapidly in Argentina, Brazil and Chile during the 2000s. A reduction in the experience premium is a fundamental driver of declines in upper-tail (90/50) inequality, while a decline in the education premium is the primary determinant of the evolution of lower-tail (50/10) inequality. Relative labor supply is important for explaining changes in the skill premiums. Relative demand trends favored high-skilled workers during the 1990s, shifting in favor of low-skilled workers during the 2000s. Changes in the minimum wage, and more importantly, commodity-led terms of trade improvements are key factors behind these relative skill demand trends.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10718.

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Length: 57 pages
Date of creation: Apr 2017
Handle: RePEc:iza:izadps:dp10718
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