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Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework

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  • Sebastian Galiani
  • Guillermo Cruces
  • Pablo Acosta
  • Leonardo C. Gasparini

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.

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  • Sebastian Galiani & Guillermo Cruces & Pablo Acosta & Leonardo C. Gasparini, 2017. "Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework," NBER Working Papers 24015, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24015
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    Cited by:

    1. 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.
    2. 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.
    3. Manuel Fernández & Gabriela Serrano, 2022. "New Perspectives on Inequality in Latin America," Documentos CEDE 020295, Universidad de los Andes – Facultad de Economía – CEDE.
    4. 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).
    5. 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).
    6. David Kunst & Richard B. Freeman & Remco Oostendorp, 2020. "Occupational Skill Premia around the World: New Data, Patterns and Drivers," NBER Working Papers 26863, National Bureau of Economic Research, Inc.
    7. 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.

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    JEL classification:

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

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