Skill Premium, Labor Supply and Changes in the Structure of Wages in Latin America

Abstract

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The effect of class assignment on academic performance and labor market: Evidence from public federal university in Brazil

“…Brazil is one of the most unequal countries in the world, and the great majority of studies suggest that the explanations for this phenomenon are in the dynamics of labour income, and more particularly in how education affects the labour market (Fernández and Messina 2018;Ferreira et al 2017). The unequal access to universities in Brazil is a persistent problem and has impacts on the labour market.…”

Two Stories of Wage Dynamics in Latin America: Different Policies, Different Outcomes

“…During the 1980s and 1990s, wage inequality in the region increased not only because of the technological changes of the time, which had similar effects in developed economies, but also because of policies implemented during that time, such as capital market liberalization, tax reforms or domestic financial sector reforms (Behrman et al, 2000). In recent years, however, the trend has reversed, and some countries have experienced reductions in wage inequality (Fernández and Messina, 2017). These authors found that wage inequality in Argentina, Brazil and Chile declined in the late 1990s and 2000s.…”

“…1 Furthermore, we analyze the labor markets of two Latin American economies. By doing so, this article adds to the existing literature on wage distributions and wage dynamics in the region and in developing countries in general (e.g., Atal et al, 2009;Carrillo et al, 2014;Fernández and Messina, 2017).…”

New Perspectives on Inequality in Latin America

“…What explains this change in dynamics of income inequality? The literature has proposed at least four potential drivers, some of which complement and reinforce each other: i) fast GDP growth and improved labor market conditions (Cornia, 2010;Gasparini and Cruces, 2013); ii) increases in education attainment and the fertility transition, which led to a larger relative supply of more educated and older workers, putting downward pressure on the education and experience premiums (Manacorda et al, 2010;Campos-Vázquez, 2013;Rodriguez Castelan et al, 2016;Fernández and Messina, 2018;Acosta et al, 2019;Messina and Silva, 2021); iii) stronger labor institutions, rising minimum wages and declining labor informality (Gasparini and Lustig, 2011;Maurizio, 2014;Amarante et al, 2016;Ferreira et al, 2017;; and iv) the arrival of governments that implemented a more progressive agenda, including increases in social assistance transfers targeted to the poor (Ferreira et al, 2008;Cornia, 2010;Gasparini and Lustig, 2011;Levy and Schady, 2013;Lustig et al, 2013). We discuss evidence on these drivers in the following sections.…”