Search results

The close relationship between education and income distribution can be seen in Brazil. While much attention has been given to the connection between education and income distribution, less attention has been paid to the variation in the rate of return to schooling across industries within regions. This chapter examines differences in the relationship between education and wages across industries. The discussion covers issues concerning wage-spread, internal labour markets and efficiency-wage; efficiency-wage models and variation in the rate of return to schooling across firms; and structure in the variation of the rate of return to schooling over industries. The data used to estimate earning functions is derived from a sample of male workers in private manufacturing firms in greater Sao Paulo. Industries with high rates of return tend to be multinational, use advanced technology, and have higher effective rates of protection. This suggests that economic policies such as protectionism exacerbate income inequality by giving the skilled and educated extra high wages.