Efficiency Gains Due to Improved Educational Levels in Brazil Are Minimal

11/29/2016 - 12h34

The improvement in Brazil's educational level in the last few decades hasn't been accompanied by the expected increase in worker productivity.

International experience has shown that as professionals within a nation attain higher levels of education their productivity normally increases as well, thereby contributing to economic growth.

Preliminary data from research conducted by Ricardo Paes de Barros, Chief-Economist of the Ayrton Senna Institute and a Professor at Insper, appear to show that this is not taking place in Brazil.

Between 1980 and 2010, each additional year of education in the country was accompanied by only an additional US$200 in productivity per worker.

This amount is insignificant compared to what has been achieved in other countries. Each additional year of education has corresponded to an expansion of US$ 3.000 in productivity per worker in Chile and US$ 6.800 in South Korea.

According to Paes de Barros, it is possible that the quality and content of the education in Brazilian schools explains why the country is on a point outside of the curve.

The deterioration in the quality of Brazilian education could also be one of the explanations for the rapid fall in extra earnings that Brazilian workers have gotten from increasing their level of education.

In 2004, each additional year of education corresponded to an increase in 9,6% in earnings in the country. In 2014, this increase had fallen to 7,2%.

Another factor that led to this reduction, according to Paes de Barros, was the increase in the minimum salary, which increased the income of workers with low levels of education.

A third explanation for the fall in the income premium was the increase in demand for less qualified labor on the part of the new middle class in the last few years.

"We have transformed into an economy intensive in low labor qualification. This is related to the type and structure of demand that the Brazilian economy has generated."

Translated by LLOYD HARDER

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