Description:
We estimate the return to technical education in Brazil between 2007 and 2018. A rich administrative record of formal labor market (Relação Anual de Informações Sociais - Rais) allows us to construct a panel of all formal workers in 2007, following them until 2018. Identification of workers was based on National Catalog of Technical Occupations (Catálogo Nacional de Cursos Técnicos - CNCT), which defines the skills that will be acquired by pupils and occupations those skills are required. Results suggest a positive and significant wage premium - between 21,3% and 24,9% in favor of workers in technical occupation/with technical education, controlling for other available observable variables (such as schooling, age, firm size, economic sector and job spell). Even restricting our sample to young workers (18 years-old) having high school diploma in the beginning of period - profile required for a technical occupation - the positive and significant wage premium remains, but in a lower magnitude (between 5,8% and 7,8%). As a consistency analysis, we use the two waves (2007 and 2014) of National Household Survey (Pesquisa Nacional por Amostra de Domicílios - PNAD), about technical education, to further investigate. We find positive impact for the 2007 and 2014 PNAD data. In 2014, however, youngster at 18 year-old the wage premium is found to be insignificant. The recession in 2014 and the tight labor may explain this lack of significancy in the wage premium for this regression. In a cost-benefit analysis, taking into consideration the returns found, technical education seems to be cost-effective if it costs up to R$ 10.381,46 monthly (at a 6% annual interest rate).