Changes in Returns to Education in Latin America: The Role of Demand and Supply of Skills
London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); Queen Mary, University of London; Centre for Economic Policy Research (CEPR)
World Bank - Development Research Group
January 1, 2010
Industrial and Labor Relations Review, Vol. 63, No. 2, 2010
Using micro data for the urban areas of Argentina, Brazil, Chile, Colombia, and Mexico, the authors document trends in men’s returns to education during the 1980s and the 1990s and estimate the role of supply and demand factors in explaining the changes in skill premia. They propose a model of demand for skills with three production inputs, corresponding to workers with primary-, secondary-, and university-level education. Further, the authors demonstrate that an unprecedented rise in the supply of workers having completed secondary-level education depressed their wages relative to workers with primary-level education throughout Latin America. This supply shift was compounded by a generalized shift in the demand for workers with tertiary education.
Keywords: Gender, Skills, Training, Labor Demand
JEL Classification: J23, M53, N36Accepted Paper Series
Date posted: June 30, 2010
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