Returns to education, intergenerational mobility, and inequality trends in Brazil
This paper takes advantage of this information to provide new estimates of the level and evolution of the returns to education in Brazil using variable premiums by education level, quantile regressions, and pseudo panels. Regarding measurement error, the empirical strategy is to make use of the information of who responded to the PNAD questionnaire but controlling for availability biases. We find evidence of attenuation bias which reduces mean returns from education between 14 and 31.5 per cent. On the other hand, omitting parents’ education information also accounting for selectivity issues reduces the premium estimates by 24 per cent. Perhaps more importantly, the fall of education premium is heavily underestimated when we do not take family background into account. The highest fall of returns occurred in intermediary levels of education and income. Cohort effects also show that the reduction in the educational premium has been going on for several generations.