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Trade Liberalization, Inequality and Poverty in Brazilian States

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  • Sztulman, Aude
  • Menéndez, Marta
  • Castilho, Marta

Abstract

This paper studies the impact of trade liberalization and international trade on household income inequality and poverty using detailed micro-data across Brazilian states, from 1987 to 2005. Results suggest that Brazilian states that were more exposed to tariff cuts experienced smaller reductions in household poverty and inequality. If significance of results on Brazilian states depends on the choice of poverty and inequality indicators, robust and contrasting results emerge when we disaggregate into rural and urban areas within states. Trade liberalization contributes to poverty and inequality increases in urban areas and may be linked to inequality declines in rural areas (no significant effect on rural poverty appears from our study). In terms of observed integration to world markets, import penetration plays a similar role as trade liberalization for Brazilian states as a whole. On the contrary, rising export exposure appears to have significantly reduced both measures of household welfare.

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Bibliographic Info

Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/1904.

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Date of creation: 2012
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Publication status: Published in World development, 2012, Vol. 40, no. 4. pp. 821-835.Length: 14 pages
Handle: RePEc:dau:papers:123456789/1904

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Keywords: Poverty; Trade liberalization; Brazil states; Inequality;

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References

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Cited by:
  1. Gaddis, Isis & Pieters, Janneke, 2012. "Trade Liberalization and Female Labor Force Participation: Evidence from Brazil," IZA Discussion Papers 6809, Institute for the Study of Labor (IZA).
  2. Kis-Katos, Krisztina & Sparrow, Robert, 2013. "Poverty, Labour Markets and Trade Liberalization in Indonesia," IZA Discussion Papers 7645, Institute for the Study of Labor (IZA).
  3. Paolo Giordano & Kun Li, 2012. "An Updated Assessment of the Trade and Poverty Nexus in Latin America," IDB Publications 79119, Inter-American Development Bank.

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