Two tales on human capital and knowledge spillovers: the case of the US and Brazil

This article uses a quasi-Mincerian approach to verify whether the concentration of college-educated individuals employed in the business support services sector and in the own sector contributes to increased productivity in other sectors of the economy. We estimate the returns to education using data from the 2008 US Current Population Survey (March supplement) and from the 2008 Brazilian household survey. This article finds evidence of a positive and significant human capital sectorial spillover effect, which is consistent with Acemoglu’s (1996) conjecture. The sectorial concentration of highly educated workers contributes to increase wages for all workers. This study also finds evidence of increasing returns to education in Brazil and diminishing returns to education in the United States. This finding may be explained by differences in supply of skilled workers in both economies. In addition, the short supply of highly skilled workers in Brazil likely explains the importance of the spillover effect from the business supporting sector.