Many countries in the world have seen a significant increase in the average levels of education completed over the past couple of decades (Roser & Ortiz-Ospina 2016). As expected, these increases had palpable economic consequences. Many studies have shown that the more education someone receives, the higher the person’s income will be (e.g. Hout 2012). This phenomenon is called economical returns to education - the extra money a person will earn by completing an additional year (or a level) of education. Since investing in education is mostly fairly costly, it is important for people to know about the benefits this additional education brings. One of the main concerns, however, could be that if more and more people are receiving …show more content…
Although Brazilian economy has been growing overall, the past decade has seen trends that may undermine future progress; between roughly the end of 1990s and 2010: (a) the employment levels were not reallocated from manufacturing to services at an expected level, (b) the export of basic products exceeded that of the manufactured products by the end of 2010s, (c) “the sectoral trade deficits of the science-, engineering- and knowledge-based manufacturing sector […] significantly increased” (Nassif, Feijó & Araújo 2014) and (d) the Brazilian manufacturing experienced an increase in technological gap and a decrease in labor productivity (Nassif, Feijó & Araújo 2014). From educational perspective, these results may point at paucity of demand of workers with higher levels of education. Therefore, we would expect a decrease of returns to education, specifically at higher levels, over the past decade in …show more content…
If economic returns to education are relatively high, this means the income gaps between the groups with different educational backgrounds will most likely be big. An increase in economic returns to education might therefore result in an increase in income inequality, and vice versa. In terms of inequality, Brazil is an interesting case, as in 1989 it was still ranked 2nd on the world inequality rank, whereas in 2004 they were ranked 10th. Brazil’s inequality has been fluctuating a lot. Its Gini coefficient, a measure of income inequality, rose from 0.57 in 1981 to 0.63 in 1989, before falling back to 0.56 in 2004 (Ferreira, Leite, & Litchfield 2006). The same study argues that many different things are considered to have played a role into bringing down inequality, with a decrease in returns on education as one of those