Volatility, higher education and inequality in Latin America. Micro and macro evidence from Argentina and Brazil

PANIGO, DEMIAN TUPAC; CARUSSI MACHADO, DANIELLE; NATICCHIONI, PAOLO

João Pessoa

Congreso; XXVI Encontro Brasileiro de Econometria; 2004

Sociedade Brasileira de Econometria

The aim of this paper is to analyze the existing relationships between real volatility and demand for higher education in Latin America.  We use micro and macro panel data from Argentina and Brazil in order to identify the aggregate and idiosyncratic risk-channels affecting human capital accumulation. Confirming the mail hypothesis of our OLG stochastic model we find out that both, aggregate real volatility and family real income volatility (mainly head’s partner real income volatility) reduce demand for higher education. Moreover, this result is not homogeneous across different income levels. Only middle income families (and states) are negatively affected by real volatility variables entailing a positive correlation between macroeconomic uncertainty and higher education enrolment polarization