Abstract:
This paper aims to analyze the effects of education on the income of individuals residing in Brazil and, specifically, in the South and Northeast regions. Estimates are made from the PNAD database for the year 2017 using the income equation proposed by Mincer (1974) and Heckman’s (1979)HECKMAN, J. Sample selection bias as a specification error. Econometrica, New Haven, v. 47, n. 1, p. 153-61, 1979. procedure to correct the selection bias. The method of Trostel (2004)TROSTEL, P. Returns to scale in producing human capital from schooling. Oxford University Press, Oxónia, v. 56, p. 461-84, 2004. is also used to calculate the returns to schooling both in Brazil and in the South and Northeast regions. As a main result, the theoretical model and its estimates indicate that in all the regions analyzed, human capital presents increasing returns, which are increasingly higher as the individual reaches higher degrees of education, pointing out that in Brazil people with 4 years of study have returns of 2.9% in their salaries; with 15 years of study the returns are 33.2%. In the South and Northeast, the values are respectively 1.8% and 2.7% for 4 years, and 26, 3% and 33.2% for 15 years of study, indicating higher returns for the Northeast region. Therefore, the results suggest that it is of fundamental importance to devise policies that encourage the completion of higher levels of education to increase workers’ income.
Keywords:
human capital; income; return of schooling