Seminario CEA-MIPP - Miercoles 29/04/2026, 12:30 HRS - Sala de Consejo, piso 4, Beauchef 851 - Is There a "Why is the College Premium Falling? The Role of Composition" - Ariadna Jou (FEN)

Tema: «Why is the College Premium Falling? The Role of Composition«

Presenta: Ariadna Jou (FEN)

Recent studies suggest that the increasing supply of college-educated workers in Latin American countries has negatively impacted returns to skill over the last two decades, as evidenced by the decreasing college premium. In this paper, we show that changes in the college premium do not accurately represent shifts in returns to skill, particularly in the context of a significant expansion in tertiary education. Using novel data with approximately one million college graduates from 20 different cohorts in Brazil, we find that returns to skill have not decreased; in fact, they increased by 24% over 16 years. The supply of college-educated workers has grown, primarily from newer, lower-ranked, and lower-wage-premium universities. Changes in the composition of college workers seem to have driven a decrease in the college premium, even though returns to skill are increasing. Using a simple supply and demand framework (Katz and Murphy, 1992) we show that skill-biased technical change (SBTC) increased by 3% per year over a 12-year period, in contrast to the apparent-0.1% yearly decrease indicated by the unadjusted data.

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