Skill premium, labor supply and changes in the structure of wages in Latin America

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Author: Fernandez, Manuel; Messina, Julian


Earnings inequality declined rapidly in Argentina, Brazil and Chile during the 2000s. A reduction in the experience premium is a fundamental driver of declines in upper-tail (90/50) inequality, while a decline in the education premium is the primary determinant of the evolution of lower-tail (50/10) inequality. Relative labor supply is important for explaining changes in the skill premiums. Relative demand trends favored high-skilled workers during the 1990s, shifting in favor of low-skilled workers during the 2000s. Changes in the minimum wage, and more importantly, commodity-led terms...  [+] Show more

Subjects: Skills and knowledge; Labour market; Equity; Income; Finance; Outcomes

Keywords: Human capital; Trend; History; Wage differential; Wage structure; Labour supply; Labour demand

Geographic subjects: South America; Argentina; Brazil; Chile

Published: Washington, District of Columbia: Inter-American Development Bank, 2017

Physical description: 51 p.

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Series: IDB working paper series; no. IDB-WP-786

Also published in 2017 as IZA discussion paper, no. 10718, available at:

Resource type: Working paper

Rights: This work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed. To view a copy of the licence visit:

Call number: TD/TNC 128.152

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