Sheepskin effects and the relationship between earnings and education: Analyzing their evolution over time in Brazil

Abstract

This paper seeks to analyze trends in sheepskin effects and in the relationship between earnings and education on the Brazilian labor Market from 1982 to 2004. Using data from the PNAD - the Brazilian National Household Sample Survey - earnings equations are estimated including linear years of schooling, and splines and discontinuous functions for completed degrees, as well as semiparametric regressions. Empirical evidence shows a reduction in sheepskin effects from 1982 to 2004, indicating that a diploma or degree completion in Brazil has been losing its value over time. At the same time, the relationship between log earnings and education has become more convex. Similar trends are verified when the analysis is carried out separately by region.