This paper estimates the impact of demographic and educational changes on the earnings and returns to schooling of workers in Brazil and Mexico. Our analysis takes into account demographic, educational and economic variations within each country over time, using Censuses microdata from Brazil and Mexico. Results suggest that demographic and educational transitions generate impact on earnings and on returns to education. The proportion of people in age-education groups tends to have a negative impact on earnings. These impacts are more detrimental among age-education groups with higher education, but they are having less of a negative effect over time. We also find that the concentration of skilled labor has positive impacts on the rates of returns to education and that they are greater than those observed in more developed countries. Moreover, in Brazil and Mexico, these effects are observed throughout the income distribution, contrary to what is observed in studies for the United States.
This paper series made possible by RAND Center for the Study of Aging, the RAND Population Research Center, the Minas Gerais Research Support Foundation, and the Brazilian Ministry of Science, Technology, and Innovation.
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