This paper tests the existence of causal relationship between the evolution of college-educated labor supply and the performance of the college premium in Brazil. Late college graduation causes sampling composition problem which may bias the impact of labor supply on the college premium. I estimate the impact of the relative supply of college-educated labor on wage, with and without controlling for the composition bias. In both cases, I find a relatively low elasticity of substitution between school groups. However, the estimate of the partial elasticity of substitution between age groups is crucially affected by the chosen estimation procedure.
college premium; pseudo panel; labor supply; elasticity of substitution
