Demographic Change and Local Labor Market Outcomes in Brazil

Ernesto F. Amaral, University of Texas at Austin
Eduardo L.G. Rios-Neto, Universidade Federal de Minas Gerais and University of Texas at Austin
Daniel Hamermesh, University of Texas at Austin
Joseph E. Potter, University of Texas at Austin

This paper estimates the impact of the changing relative size of the adult male population classified by age and education groups on the earnings of employed males living in 502 Brazilian local labor markets during four time periods spanning thirty years. It takes advantage of the huge variation in age and educational structure across these local labor markets, a change that occurred over the 1970-2000 period, to test the impact of the relative size of age-education groups on earnings. This paper is an attempt to contribute to the demographic dividend literature by inserting cohort size and supply-demand frameworks in the determination of the productivity component that appears in the basic equation for per capita income growth. This approach adds another indirect effect of age structure to the per capita income equation, complementing the usual focus on the first and second demographic dividends.