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Changes in Returns to Education in Latin America: The Role of Demand and Supply of Skills

Posted: 30 Jun 2010  

Marco Manacorda

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); Queen Mary, University of London; Centre for Economic Policy Research (CEPR)

Norbert Schady

World Bank - Development Research Group

Carolina Sánchez-Páramo

World Bank

Date Written: January 1, 2010

Abstract

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, N36

Suggested Citation

Manacorda, Marco and Schady, Norbert and Sánchez-Páramo, Carolina, Changes in Returns to Education in Latin America: The Role of Demand and Supply of Skills (January 1, 2010). Industrial and Labor Relations Review, Vol. 63, No. 2, 2010. Available at SSRN: https://ssrn.com/abstract=1632952

Marco Manacorda (Contact Author)

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Queen Mary, University of London

Mile End Road
London, London E1 4NS
United Kingdom

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Norbert Schady

World Bank - Development Research Group ( email )

1818 H Street NW
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/nschady

Carolina Sánchez-Páramo

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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