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Education, earnings, and inequality in Brazil, 1982-98 - implications for education policy


  • Blom, Andreas
  • Holm-Nielsen, Lauritz
  • Verner, Dorte


The educational attainment of Brazil's labor force, has gradually increased over the past two decades. At the same time, the government has pursued a series of economic structural adjustment policies. The authors investigate how these simultaneous advances have altered the relationship between labor market earnings, and education. They find that the returns to education in the labor market, fundamentally changed between 1982, and 1998. While the returns to tertiary education increased sharply, the returns to primary education dropped by 26 percent, and those to lower secondary, by 35 percent. Moreover, the authors argue, the marginal reduction in wage inequality that occurred in this period was linked primarily to a reduction in the returns to schooling, and only secondarily, to a more equitable distribution of schooling. The findings suggest that the supply of highly skilled labor is inadequate to meet demand. That suggests a need for policy action aimed at increasing access to, and completion of tertiary education. Increasing the supply of highly skilled labor, would improve prospects for both economic growth, and reduce wage inequality.

Suggested Citation

  • Blom, Andreas & Holm-Nielsen, Lauritz & Verner, Dorte, 2001. "Education, earnings, and inequality in Brazil, 1982-98 - implications for education policy," Policy Research Working Paper Series 2686, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2686

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    References listed on IDEAS

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    5. Fiess, Norbert M. & Verner, Dorte, 2004. "The dynamics of poverty and its determinants - the case of the Northeast of Brazil and its states," Policy Research Working Paper Series 3259, The World Bank.
    6. Robbins, Donald & Gindling, T H, 1999. "Trade Liberalization and the Relative Wages for More-Skilled Workers in Costa Rica," Review of Development Economics, Wiley Blackwell, vol. 3(2), pages 140-154, June.
    7. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    8. Behrman, Jere R & Birdsall, Nancy, 1985. "The Quality of Schooling: Reply," American Economic Review, American Economic Association, vol. 75(5), pages 1202-1205, December.
    9. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
    10. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    11. Adrian Wood, 2002. "Globalization and wage inequalities: A synthesis of three theories," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(1), pages 54-82, March.
    12. Dan T. Rosenbaum, 2000. "Ability, Educational Ranks, and Labor Market Trends: The Effects of Shifts in the Skill Composition of Educational Groups," JCPR Working Papers 146, Northwestern University/University of Chicago Joint Center for Poverty Research.
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    Cited by:

    1. Aysit Tansel & Fatma Bircan Bodur, 2012. "Wage Inequality and Returns to Education in Turkey: A Quantile Regression Analysis," Review of Development Economics, Wiley Blackwell, vol. 16(1), pages 107-121, February.
    2. Anuneeta Mitra, 2016. "Education and earning linkages of regular and casual workers in India: a quantile regression approach," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 18(1), pages 147-174, October.
    3. Justesen, Michael, 2008. "Is the window of opportunity closing for Brazilian youth? Labor market trends and business cycle effects," Social Protection and Labor Policy and Technical Notes 47188, The World Bank.
    4. Tushar Agrawal, 2011. "Returns to education in India: Some recent evidence," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2011-017, Indira Gandhi Institute of Development Research, Mumbai, India.
    5. Benoit, Lorel, 2008. "Assessing Brazilian Educational Inequalities," Revista Brasileira de Economia - RBE, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 62(1), September.
    6. Monsueto, Sandro Eduardo & Braz Golgher, André & Machado, Ana Flávia, 2006. "Earning inequalities in Brazil: quantile regressions and the decomposition approach," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    7. Yang Wang, 2015. "Education Expansion and Decline in Tertiary Premium in Brazil: 1995-2013," Working Papers 1525, Tulane University, Department of Economics.
    8. Letícia Xander Russo & Joilson Dias, 2016. "The Health Influence On Returns To Education In Brazil: A Nonlinear Approach," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42ndd Brazilian Economics Meeting] 200, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].


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