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Demographic Change and the Structure of Wages: A Demand-Theoretic Analysis for Brazil

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  • Ernesto F. L. Amaral
  • Daniel S. Hamermesh
  • Joseph E. Potter
  • Eduardo L.G. Rios-Neto

Abstract

With rapidly declining fertility and increased longevity the age structure of the labor force in developing countries has changed rapidly. Changing relative supply of workers by age group, and by educational attainment, can have profound effects on labor costs. Their impacts on earnings have been heavily studied in the United States but have received little attention in Asia and Latin America, where supply shocks are at least as large and have often proceeded less evenly across the economy. We use data on 502 local Brazilian labor markets from Censuses 1970-2000 to examine the extent of substitution among demographic groups as relative supply has changed. The results suggest that age-education groups are imperfect substitutes, so that larger age-education cohorts see depressed wage rates, particularly among more-educated groups. The extent of substitution has increased over time, so that the decreasing size of the least-skilled labor force today is barely raising its remaining members' wages.

Suggested Citation

  • Ernesto F. L. Amaral & Daniel S. Hamermesh & Joseph E. Potter & Eduardo L.G. Rios-Neto, 2007. "Demographic Change and the Structure of Wages: A Demand-Theoretic Analysis for Brazil," NBER Working Papers 13533, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:13533
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    Cited by:

    1. Ernesto Friedrich de Lima Amaral & Mariana Eugenio Almeida & Eduardo Luiz Gonçalves Rios‐Neto & Joseph E. Potter, 2013. "Effects of the Age–Education Structure of Female Workers on Male Earnings in Brazil," Poverty & Public Policy, John Wiley & Sons, vol. 5(4), pages 336-353, December.
    2. Amaral, Ernesto F. L., 2012. "The decomposition of economic outcomes as a result of changes in Brazil’s male age-education structure," OSF Preprints e6v5c, Center for Open Science.
    3. Amaral, Ernesto F. L. & Rios-Neto, Eduardo L G & Potter, Joseph E, 2012. "Long term influences of age-education transition on the Brazilian labour market," OSF Preprints 2e4f3, Center for Open Science.
    4. Mardukhi, Jian, 2010. "The General Equilibrium Wage Impact of Trade-Induced Shifts in Industrial Compositions of Employment in Brazilian Cities, 1991-2000," MPRA Paper 25916, University Library of Munich, Germany.
    5. Amaral, Ernesto F. L. & Almeida, Mariana E & Rios-Neto, Eduardo L G & Potter, Joseph E, 2013. "Effects of the age-education structure of female workers on male earnings in Brazil," OSF Preprints tn4u9, Center for Open Science.
    6. Ernesto Lima Amaral, 2012. "The Decomposition of Economic Outcomes as a Result of Changes in Brazil’s Male Age–Education Structure," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 31(6), pages 883-905, December.

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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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