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Trade liberalization, the exchange rate and job flows in Brazil

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Author Info

  • Eduardo Pontual Ribeiro
  • Carlos Corseuil
  • Daniel Santos
  • Paulo Furtado
  • Brunu Amorim
  • Luciana Servo
  • Andre Souza

Abstract

Brazil underwent a large trade liberalization process in the 1990s. Over the period, manufacturing employment decreased significantly, generating public debate on the need to revert liberalization. This paper aims to identify the actual effect of trade liberalization on employment, separating it from exchange rate movements using a gross job flow approach. Our novel dataset covers all sectors and formally registered enterprises, and we use new sector specific exchange rate data. Our estimates suggest that greater openness reduce jobs through increased job destruction, with no effect on job creation, but the exchange rate matters also. Depreciations expand the number of jobs in manufacturing by increasing creation, with no effect on destruction.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/1384128042000285174
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Economic Policy Reform.

Volume (Year): 7 (2004)
Issue (Month): 4 ()
Pages: 209-223

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Handle: RePEc:taf:jpolrf:v:7:y:2004:i:4:p:209-223

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Related research

Keywords: Trade liberalization; Exchange rate; Gross job flows; Brazil;

References

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  1. Fajnzylber, Pablo & Maloney, William F. & Ribeiro, Eduardo, 2001. "Firm entry and exit, labor demand, and trade reform : evidence from Chile and Colombia," Policy Research Working Paper Series 2659, The World Bank.
  2. Davis, Steven J & Haltiwanger, John C, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 819-63, August.
  3. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, January.
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Citations

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Cited by:
  1. Pedro S. Martins & Luiz A. Esteves, 2012. "Wages and Profits in Manufacturing Firms: Matched-Panel Evidence from Brazil," Economia, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 13(3b), pages 815_841.
  2. Haltiwanger, John & Kugler, Adriana & Kugler, Maurice & Micco, Alejandro & Pagés, Carmen, 2004. "Effects of tariffs and real exchange rates on job reallocation: evidence from Latin America," Discussion Paper Series In Economics And Econometrics 0410, Economics Division, School of Social Sciences, University of Southampton.
  3. Pedro S. Martins & Luiz A. Esteves, 2008. "Is There Rent Sharing in Developing Countries? Matched-Panel Evidence from Brazil," Working Papers 14, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
  4. Naercio Menezes-Filho, 2004. "The Costs of Displacement in Brazil," Econometric Society 2004 Latin American Meetings 200, Econometric Society.
  5. Demir, Firat, 2010. "Exchange Rate Volatility and Employment Growth in Developing Countries: Evidence from Turkey," World Development, Elsevier, vol. 38(8), pages 1127-1140, August.
  6. Naércio Aquino Menezes Filho & Marc-Andreas Muendler, 2007. "Labor Reallocation in Response to Trade Reform," CESifo Working Paper Series 1936, CESifo Group Munich.
  7. Ligia Alba melo B. & Carlos Adrés Ballesteros R, 2012. "Creación, destrucción y reasignación del empleo en el sector manufacturero colombiano," Borradores de Economia 699, Banco de la Republica de Colombia.
  8. Schuster, Philip, 2012. "Employment Protection, Labor Market Turnover, and the Effects of Globalization," Economics Series 288, Institute for Advanced Studies.
  9. Marc-Andreas Muendler, 2007. "Trade and Workforce Changeover in Brazil," NBER Working Papers 12980, National Bureau of Economic Research, Inc.
  10. Martin-Barroso, David & Nuñez-Serrano, Juan Andres & Turrion, Jaime & Velazquez, Francisco J., 2011. "The European Map of Job Flows," MPRA Paper 33602, University Library of Munich, Germany, revised 2011.

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