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This chapter explores the extent to which the productivity and wages of Brazilian workers can be improved through additional years of formal schooling. The authors analyse a series of data sets covering each year between 1976 and 1989. The wage-education profile in Brazil is found to be much steeper than in other countries, wage gains from university education are greater than those from primary education, contributing to large differences in wages between the skilled and unskilled, resulting in a high level of inequality. The authors found that wage gains from primary education have clearly decreased since 1976, while the gains from university education have increased, contributing to the failure of income distribution in Brazil to improve. The authors stress that gaining a more accurate understanding of the relationship between education, and wages and productivity is key to formulating policies aimed at increasing growth and reducing inequality, which represent the two major long-term challenges for Brazilian society.