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Trade Liberalization, Inequality and Poverty in Brazilian States

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  • Marta Castilho

    ()
    (Universidade Federal Fluminense, Rio de Janeiro, Brazil)

  • Marta Menéndez

    ()
    (Université Paris-Dauphine, LEDa-DIAL, Paris - Paris School of Economics)

  • Aude Sztulman

    ()
    (Université Paris-Dauphine, LEDa-DIAL, Paris)

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 is found for rural poverty). 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. _________________________________ Cet article étudie l’impact de la libéralisation commerciale et du commerce international sur les inégalités de revenu et le niveau de pauvreté des ménages au sein des états brésiliens, à partir de données individuelles sur la période 1987-2005. D’après l’étude économétrique, les états brésiliens, davantage touchés par la libéralisation commerciale, ont connu de plus faibles réductions des inégalités ou de la pauvreté. Pour les états brésiliens dans leur ensemble, la significativité des résultats dépend du choix des indicateurs de pauvreté et d’inégalité mais, dès lors que l’on distingue les zones rurales et urbaines au sein des états, les effets sont robustes et contrastés. En zone urbaine, la libéralisation commerciale aurait contribué à accroître les niveaux de pauvreté et d’inégalité, tandis qu’elle entraînerait une diminution des inégalités en zone rurale (aucun impact significatif n’est observé sur la pauvreté rurale). En termes d’insertion des états brésiliens dans le commerce international, une hausse du taux de pénétration des importations joue dans le même sens que la libéralisation commerciale. Mais la propension à exporter d’un état contribuerait à réduire tant la pauvreté que les inégalités de revenu.

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Bibliographic Info

Paper provided by DIAL (Développement, Institutions et Mondialisation) in its series Working Papers with number DT/2010/02.

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Length: 39 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:dia:wpaper:dt201002

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Keywords: Trade liberalization; poverty and inequality; Brazilian states; Libéralisation commerciale; pauvreté et inégalités; états brésiliens.;

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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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