Education and Changes in Brazilian Wage Inequality, 1976-2001
In countries with high levels of inequality, progress in education has often been placed high in the list of policy proposals designed to change the unequal state of affairs. This study uses Brazilian annual data to chart the trends in wage inequality and a decomposition procedure to ascertain how wage distribution was affected by advances in education that doubled the median schooling level of prime-age men during the sample period. The results show that while falling returns to education were an equalizing factor across the wage distribution, changes in the educational composition of the work force exerted a disequalizing influence that was strongest at the top of the distribution. The net result was a fall in wage dispersion that was not as dramatic as might have been hoped.