Human capital differentials across municipalities and states in Brazil

In this paper, we investigate the distribution of more educated and skilled people in Brazilian municipalities and states. Previous evidence shows a high concentration of college educated and high skilled workers in some areas of the country. We investigate whether the increase in the number of high skill workers is faster in municipalities with high initial levels of human capital than in municipalities with lower initial levels. We develop a theoretical model to explain the convergence/divergence of regional skill levels In Brazil. We estimate OLS models based on the theoretical model to explain empirically wage differentials in Brazil. Last, we compute standard segregation and isolation measures to show the trends in the distribution of skilled workers across states and cities in Brazil. We find that educated and qualified workers are concentrated in some areas of the country and recent decades show a higher concentration of them across states and cities.