workers with secondary education and workers with primary education, which was stable during the 1990s and then narrowed after 2002.

Both panels of figure 10 plot the estimated variations in the returns to schooling for the 17 countries in Latin America, plus Russia, South Africa, Turkey, and the United States. In particular, the left panel shows the annual changes in the country-specific labor earnings premiums of workers with secondary education relative to workers with primary or less education, and the right panel shows the annual changes in the country-specific labor earnings premiums of college-educated workers relative to workers with primary or less education. The variations have been truncated at 20 percent in absolute terms to control for outliers.

Figure 10 Annual growth rate of the education premium and labor income inequality, selected countries, 1990–2003 and 2003–10 _Sources:_ Seventeen Latin American countries: SEDLAC database; Russia: the Russia Longitudinal Monitoring Survey; Post Apartheid Labor Market Series: South Africa; Turkey: I2D2-LFS; the United States: I2D2-IPUMS. See annexes A.1 and A.2 for details. _Note:_ The underlying data represent the change in wage inequality and the change in the earnings premiums for each country and circa period. The years selected for each country-circa combination may be different depending on survey availability and to assure, to the extent possible, within-country comparability for each period; see annex B.1 for details. In the case of the y-axis, the growth rate of the education premium is plotted. For the x-axis, the growth rate of the labor income Gini is plotted. The educational categories—college, high school, and primary education or less (reference category)—follow country-specific education systems; see section 3 and equation 1 for details. The sample covers full time, wage, and self-employed workers 15–64 years of age. The values of the 1st and 100th percentiles of the earnings distribution were trimmed by each gender-education cell. The size of the bubbles represent the population of the country.

Our results show that countries with the most substantial decline in labor income inequality during the past decade (the countries on the left side of the x-axes) are also the countries that experienced negative expansion in the earnings gap (the blue bars). This pattern is more consistent in the declines in the earnings premiums of workers with college education, with the notable exception of South Africa, Russia, and some Latin American economies during the 1990s: Ecuador and, to a lesser extent, Chile and Uruguay (figure 10, panel b). The case of Costa Rica is also noteworthy because Costa Rica is the only country in which labor earnings inequality did not narrow during the last decade. In Costa Rica, the earnings premium of workers with secondary education widened relative to workers with primary education, although the earnings gap between workers with college education and workers with primary education narrowed. Russia and Bolivia, the countries exhibiting the largest decline in earnings inequality during the 2000s, showed a significant reduction in both education premiums. Earnings gaps—both between workers with secondary education and workers with primary education and between workers with college education and workers with primary education—were heterogeneous and less volatile between 1990 and 2003, although there was no clear pattern.

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