Journal Article

Skills, Exports, and the Wages of Seven Million Latin American Workers

Irene Brambilla, Rafael Dix-Carneiro, Daniel Lederman and Guido Porto

in The World Bank Economic Review

Volume 26, issue 1, pages 34-60
Published in print February 2012 | ISSN: 0258-6770
Published online July 2011 | e-ISSN: 1564-698X | DOI:
Skills, Exports, and the Wages of Seven Million Latin American Workers

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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.

Keywords: F13; F14

Journal Article.  10035 words.  Illustrated.

Subjects: International Trade

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