Wage differentials between the so called “Braziguaios ” and the Brazilian emigrants coming back from the United States: an application of counter-factuals micro-simulation

Denise Marques, Centro de Desenvolvimento e Planejamento Regional (CEDEPLAR)
Geovane Maximo, Centro de Desenvolvimento e Planejamento Regional (CEDEPLAR)

Migrations between Brazil, The United States and Paraguay, in terms of the number of migrants are the most significant in Brazil, South America’s largest country with the fifth largest population in the world. Although the migratory flow from Brazil to the countries stated above are equally significant, the profile of the returning migrants is, however, far from homogenous. This paper, focusing on the characteristics and social-economic as well as demographic attributes of the international emigrants received in Brazil from 1995 to 2000, means to investigate the importantance of the relationship between schooling and income/average hour of those returning from the United States on a fixed date in the above mentioned period through a counter-factual micro-simulation, supposing the latter had the same schooling as those returning from Paraguay and vise-versa. The results demonstrate that Brazilian emigrants returning from the United States received an average 25% lower wage in case they had the same schooling as the emigrants returning from Paraguay. Those returning from Paraguay, on the other hand, having the same schooling as those returning from the United States would have an average increase of 13.8% in their wages. This result appears to confirm the Human Capital Theory, since schooling has explained most of the existing wage differences between the two groups being studied.