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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. 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, December.
  2. Steve J. Davis & John Haltiwanger, 1991. "Gross Job Creation, Gross Job Destruction and Employment Reallocation," NBER Working Papers 3728, National Bureau of Economic Research, Inc.
  3. 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.
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Citations

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Cited by:
  1. Naercio Menezes-Filho, 2004. "The Costs of Displacement in Brazil," Econometric Society 2004 Latin American Meetings 200, Econometric Society.
  2. John Haltiwanger & Adriana Kugler & Maurice Kugler & Alejandro Micco & Carmen Pages, 2004. "Effects of tariffs and real exchange rates on job reallocation: evidence from Latin America," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 7(4), pages 191-208.
  3. Demir, Firat, 2010. "Exchange Rate Volatility and Employment Growth in Developing Countries: Evidence from Turkey," MPRA Paper 24477, University Library of Munich, Germany.
  4. Ligia Alba Melo & Carlos Andrés Ballesteros, 2013. "Creación, destrucción y reasignación del empleo en el sector manufacturero colombiano," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 15(28), pages 281-311, January-J.
  5. Martins, Pedro S. & Esteves, Luiz A., 2006. "Is There Rent Sharing in Developing Countries? Matched-Panel Evidence from Brazil," IZA Discussion Papers 2317, Institute for the Study of Labor (IZA).
  6. Muendler, Marc-Andreas, 2007. "Labor Reallocation in Response to Trade Reform," University of California at San Diego, Economics Working Paper Series qt3cm38535, Department of Economics, UC San Diego.
  7. 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.
  8. Marc-Andreas Muendler, 2008. "Trade and Workforce Changeover in Brazil," NBER Chapters, in: The Analysis of Firms and Employees: Quantitative and Qualitative Approaches, pages 269-308 National Bureau of Economic Research, Inc.
  9. 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.
  10. Schuster, Philip, 2012. "Employment Protection, Labor Market Turnover, and the Effects of Globalization," Economics Series 288, Institute for Advanced Studies.

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