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Expanding higher education and wage inequality in Chile

Author

Listed:
  • Yoshimichi Murakami
  • Tomokazu Nomura

Abstract

Purpose - This study aims to analyse the contribution of the expansion and diversification of higher education to Chile's increase in wage inequality from 1992 to 2000 and its subsequent decrease from 2000 to 2013. Design/methodology/approach - The wage equation for each year is estimated using data from the national household survey,Encuesta de Caracterización Socioeconómica Nacional(CASEN). Using the method proposed by Firpoet al.(2009), the evolution of wage changes is decomposed into composition and wage structure effects of each explanatory variable at different points of the wage distribution. Findings - The results show that the positive composition effect of higher education, derived from the increasing share of both workers with university degrees and those with vocational degrees, is substantially larger at the upper quantiles and exceeds the negative wage structure effect, thereby contributing to increasing wage inequality from 1992 to 2000. By contrast, the negative wage structure effect of higher education, primarily derived from the decreasing return to university degrees, is substantially larger at the upper quantiles and exceeds the positive composition effect, thereby contributing to decreasing wage inequality from 2000 to 2013. Originality/value - This study contributes to the literature by showing that the expansion of higher education increased inequality in the 1990s and decreased it in the 2000s while the increasing supply of workers with vocational degrees decreased wage premiums for university degrees in the latter period.

Suggested Citation

  • Yoshimichi Murakami & Tomokazu Nomura, 2020. "Expanding higher education and wage inequality in Chile," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(4), pages 877-889, February.
    • Handle: RePEc:eme:jespps:jes-12-2018-0445
    DOI: 10.1108/JES-12-2018-0445
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    Citations

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    Cited by:

    1. Yoshimichi Murakami, 2021. "Trade liberalization and wage inequality: Evidence from Chile," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 30(3), pages 407-438, April.
    2. Yoshimichi Murakami & Tomokazu Nomura, 2023. "Decline in values of degrees and recent evolution of wage inequality: Evidence from Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 50(1 Year 20), pages 55-132, June.
    3. Campos-González, Jorge & Balcombe, Kelvin, 2024. "The race between education and technology in Chile and its impact on the skill premium," Economic Modelling, Elsevier, vol. 131(C).

    More about this item

    Keywords

    Higher education; Wage inequality; Chile; Unconditional quantile regression; D31; I23; I24; J31; O15; O54;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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