OECD/ECLAC REGIONAL CONSULTATION

Inclusive Growth in Latin America and the Caribbean

Education and Inclusive Growth in Brazil

Naercio Menezes FilhoInsper Institute and University of Sao Paulo

Introduction

EDUCATION

Labor Market

PovertyInnovation

Economic GrowthInequality

Bolsa-Familia

S

D

Doing Business

Recent improvements in Education

Net Enrollment Rate

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Fundamental HighSchool College

Falling education wage differentials

Growth in differentials wrt 1992

0,80

0,85

0,90

0,95

1,00

1,05

1,10

1,15

1,20

1,25

1992 1993 1994* 1995 1996 1997 1998 1999 2000* 2001 2002 2003 2004 2005 2006 2007 2008 2009

Fundamental High School College

Leading to a fall in inequality

Income Ratios

0

10

20

30

40

50

60

70

80

20% richest/20% poorest 10% richest/10% poorest

Productivity still a major problem

Source: Conference Board (2011)

Relative Labor Productivity (GDP per Worker) - 2010

0 20 40 60 80 100

Brazil

South Africa

Chile

Mexico

Argentine

Portugal

Korea

Finland

Canada

UK

France

USA

Productivity Growth has been low

Source: Conference Board (2011)

Productivity Growth - 2005/2010

0

1

2

3

4

5

6

7

8

Labor Productivity Real Gdp Employment

%

Major Emerging Economies Brazil

Labor Productivity: Industry

• Low productivity in the services sector • Poor infra-structure & complicated tax

system• Doing business• No international competition -> “close

& protect”• Universities distant from firms• Bureaucratic incentives legislation• Old-fashioned managerial practices • Education

Explanations

Quality of education still a problem

PISA 2009 - Share below level 1

0

10

20

30

40

50

60

%

Quality Improving very slowly

1995 1997 1999 2001 2003 2005 2007 2009 2011100

120

140

160

180

200

220

240

260

280

300

190.6 190.8

181.0176.3 177.1

182.4193.5

204.3209.6

253.2 250.0246.4 243.4 245.0

239.5

247.4 248.7 250.6

281.9288.7

280.3 276.7 278.7271.3 272.9 274.7 273.9

4a Série do E.F. 8a Série do E.F. 3a Série do E.M.

Leading to low rate of innovations

12

Patents per Population and PISA

USAJPN

DEU KORFRA

GBR

NLD

CHESWE

CANITA

F IN

AUS

SPA

ISR

DNK

AUT BEL

NOR SGP

RUSBRA

IRL

TUR

NZL

LUX

POL

TUN

MEX

CZE

SVN

PTGRCCHI

THA

L IE

ISL

HRV

COL

SVK

EST

BGR

LVA

SRBKAZ

ARG

IDN

LTU

ROM

TUN

QAT

PER

URYPAN

-10,00

-8,00

-6,00

-4,00

-2,00

0,00

2,00

350 400 450 500 550 600

PISA 2009 - mathematics

ln(p

ate

nts

/po

pu

lati

on

) -

PC

T in

tern

ati

on

al a

pp

lica

tio

ns

It is Possible to Change!

2005 2007 2009 2011140

160

180

200

220

240

260

280

Quality of Education in Selected Municipal-ities

SOBRAL FOZ DO IGUACU RIO DE JANEIRO SAO PAULO

Demographic Transition

Implications of Demography

• Education -> more money, need fewer teachers?

• Health -> more money, more beds available?

• Crime -> less crime?• Labor Market -> less people?• Pensions -> public deficit?• Imigration -> problem or solution?

Conclusions

1) Access to schools has improved substantially

2) Led to fall in inequality after a long time

3) But high productivity gap & low growth

4) Skills gap

5) Managerial practices, legislation, competition

6) Leading to low rate of innovations

7) Fall in potential growth rate

8) Management in public schools is essential

Naercio Menezes FilhoProfessor of EconomicsInsper Institute of Education and ResearchUniversity of Sao Paulo

naercioamf@insper.edu.br