The relationship between school performance and future wages in Brazil

This paper examines whether the quality of learning, measured by the scores obtained by the 1978 generation at the end of high school (1995), affects the wages received by this cohort five years later, measured in the 2000 Census. We compute average wages and proficiency for each state/race/gender cell and correct the selection bias caused by migrations and by the high educational level of the sample using Dahl (2002)'s model. School inputs are used as instrumental variables for proficiency. The results show that the average test scores impact wages, with an estimated elasticity of 0.3.