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

Listed author(s):
  • Sebastian Galiani
  • Guillermo Cruces
  • Pablo Acosta
  • Leonardo C. Gasparini

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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 24015.

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Date of creation: Nov 2017
Handle: RePEc:nbr:nberwo:24015
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  1. Lawrence F. Katz & Kevin M. Murphy, 1992. "Changes in Relative Wages, 1963–1987: Supply and Demand Factors," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 35-78.
  2. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 705-746.
  3. Marco Manacorda & Carolina Sanchez-Paramo & Norbert Schady, 2010. "Changes in Returns to Education in Latin America: The Role of Demand and Supply of Skills," ILR Review, Cornell University, ILR School, vol. 63(2), pages 307-326, January.
  4. Javier Alejo & Marcelo Bérgolo & Fedora Carbajal, 2013. "Las Transferencias Públicas y su impacto distributivo: La Experiencia de los Países del Cono Sur en la década de 2000," CEDLAS, Working Papers 0141, CEDLAS, Universidad Nacional de La Plata.
  5. Gallego, Francisco A., 2012. "Skill Premium in Chile: Studying Skill Upgrading in the South," World Development, Elsevier, vol. 40(3), pages 594-609.
  6. Pablo Acosta & Leonardo Gasparini, 2007. "Capital Accumulation, Trade Liberalization, and Rising Wage Inequality: The Case of Argentina," Economic Development and Cultural Change, University of Chicago Press, vol. 55, pages 793-812.
  7. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
  8. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
  9. Leonardo Gasparini & Guillero Cruces & Leopoldo Tornarolli, 2011. "Recent Trends In Income Inequality In Latin America," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Spring 20), pages 147-201, January.
  10. Pablo Acosta & Gabriel V. Montes-Rojas, 2008. "Trade Reform and Inequality: The Case of Mexico and Argentina in the 1990s," The World Economy, Wiley Blackwell, vol. 31(6), pages 763-780, June.
  11. Gabriel Montes Rojas, 2006. "Skill premia in Mexico: demand and supply factors," Applied Economics Letters, Taylor & Francis Journals, vol. 13(14), pages 917-924.
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