Year: 2011
Type: article
Study design: Observational Study
Abstract: The returns to schooling and the skill premium are key parameters in various fields and policy debates, including the literatures on globalization and inequality, international migration, and technological change.This paper explores the skill premium and its correlation with exports in Latin America, thus linking the skill premium to the emerging literature on the structure of trade and development.Using data on employment and wages for over seven million workers from sixteen Latin American economies, the authors estimate national and industry-specific returns to schooling and skill premiums and study some of their determinants.The evidence suggests that both country and industry characteristics are important in explaining returns to schooling and skill premiums.The analyses also suggest that the incidence of exports within industries, the average income per capita within countries, and the relative abundance of skilled workers are related to the underlying industry and country characteristics that explain these parameters.In particular, sectoral exports are positively correlated with the skill premium at the industry level, a result that supports recent trade models linking exports with wages and the demand for skills.JEL codes: F13, F14In the field of international trade, the skilled-wage premium is a key parameter linking globalization with income distribution.Goldberg and Pavcnik (2007), for instance, highlight that increases in the returns to schooling might reflect trade-induced skill-biased technical change, a channel through which
Source: The World Bank Economic Review
DOI: 10.1093/wber/lhr020
Institutions: Princeton University, Universidad Nacional de La Plata, World Bank
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: bronze
Funder: World Bank Group
OpenAlex ID: W1839906274