Ethnic segregation in Sao Paulo schools, and its relationship with employment and wages

Following Thursday's post about ethnic segregation and spatial inequality in Europe, I was interested to dig out this 2017 article from my to-be-read pile, by Gustavo Fernandes (Fundacao Getulio Vargas, Brazil), published in the journal World Development (sorry, I don't see an ungated version online). Fernandes used data from the 2005 School Census and the 2010 Population Census for the city of Sao Paulo, and looked at the association between segregation within public and private schools, and employment and wages for those aged 18-35. As motivation, he notes that:

The belief that Brazil has benefitted from an absence of racial and ethnic problems has been widely accepted over the last century. Brazil has often been described as a racial democracy.

Part of the motivation, then, is to debunk this 'myth'. I'm not quite sure that this counts as debunking though:

...our results show that Sao Paulo is not a city with a high degree of segregation, especially when compared to the U.S. In the city, approximately 21.29% of students would have to change schools to a new institution in order to achieve an equal composition of students by color among the entire student population of the city.

That's a fairly low level of segregation, compared not just with the U.S., but with many other countries (for instance, there's a lot of concern about segregation in the New Zealand school system). But is segregation related to inequality? Fernandes finds that, for Sao Paulo:

...segregation is correlated with the level of development in the region, which positively affects the expected returns of brancos and amarelos and negatively affects those of pretos e pardos. This result appears to be explained by the predominance of brancos and amarelos in private schools, despite the fact that most of the population of white students attends public schools. However, the effect of segregation becomes negligible when analyzing only the outcomes of students within the public school system.

The predominance of whites in private schools may be the main reason for the deep economic inequality found in Sao Paulo among races. Those schools provide a higher quality of education in comparison to public schools. They may also offer access to social networks that lead to better jobs. Both factors can exponentially increase the average income of the entire white population, resulting in large disparities between the wages of whites and the wages of pardos and pretos.

The brancos and amarelos (whites and Asians, respectively) tend to make up the majority of the class in private schools, and it is private school segregation (and not public school segregation) that is most associated with young adult employment and wages.

Ultimately, this paper demonstrates a result that is the opposite of the paper I discussed last Thursday, where greater segregation was associated with lower spatial inequality. It is impossible to reconcile the results given the wide difference in methods (not least the difference between cross-country analysis at the regional level, and small-area analysis of neighbourhoods within a single city in Brazil). However, this does demonstrate that more research on this topic is needed.