How does the worker's contribution to productivity explain the decrease in inequality in South America?

Abstract

The considerable reduction of inequality in South America in the period 2002-2011, consistent with the economic cycle, is directly related to the decrease in the skill premium among workers, whose main cause is productivity. When analyzing the relationship between wage qualification and productivity, we observe how unskilled workers have increased their contribution to production, which explains a retribution in the form of a higher wage for their work than that of skilled workers. The effort that has been made to improve the quality of initial and primary education and to emphasize the capacity of higher education to respond to the real economic needs of South America is therefore coherent.