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Trade liberalization and labor market adjustment in Brazil

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  • Pavcnik, Nina
  • Blom, Andreas
  • Goldberg, Pinelopi
  • Schady, Norbert

Abstract

The authors study the impact of the 1988-94 trade liberalization in Brazil on wage distribution. They explore three main channels through which trade liberalization could have affected wage distribution: (1) increasing returns to skilled workers because of Hecksher-Ohlin adjustments to trade policy; (2) trade-induced skill-biased technological change; and (3) changes in industry wage premiums. The results suggest that trade reform inBrazil did contribute to the growing skill premium through skill-biased technological change, which was partially instigated by increased foreign competition. The authors also find that sector-specific returns to skill increased more in sectors with bigger tariff reductions. But they find little support for Hecksher-Ohlin type adjustments to trade reform. Overall, the effects of trade reform on wage inequality seem relatively small.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2982.

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Date of creation: 31 Mar 2003
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Handle: RePEc:wbk:wbrwps:2982

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Keywords: Water and Industry; Municipal Financial Management; Health Monitoring&Evaluation; Environmental Economics&Policies; Public Health Promotion; Municipal Financial Management; Health Monitoring&Evaluation; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Environmental Economics&Policies; Water and Industry;

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References

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  1. Carneiro, Francisco Galrao & Arbache, Jorge Saba, 2003. "The Impacts of Trade on the Brazilian Labor Market: A CGE Model Approach," World Development, Elsevier, vol. 31(9), pages 1581-1595, September.
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Citations

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Cited by:
  1. Thierry Verdier, 2005. "Intégration commerciale « socialement responsable » : une approche en termes d'économie politique," Revue d’économie du développement, De Boeck Université, vol. 19(4), pages 55-121.
  2. Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003. "The response of the informal sector to trade liberalization," Journal of Development Economics, Elsevier, vol. 72(2), pages 463-496, December.
  3. Verner, Dorte, 2004. "Education and its poverty-reducing effects: The case of Paraiba, Brazil," Policy Research Working Paper Series 3321, The World Bank.
  4. Rim BEN AYED MOUELHI, 2007. "The Impact Of Trade Liberalization On Tunisian Manufacturing: Structure, Performance And Employment," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 25, pages 87-114.
  5. Bernhard G. GUNTER & Rolph HOEVEN, 2004. "The social dimension of globalization: A review of the literature," International Labour Review, International Labour Organization, vol. 143(1-2), pages 7-43, 03.
  6. Menéndez, Marta & Castilho, Marta & Sztulman, Aude, 2009. "Trade Liberalization, Inequality and Poverty in Brazilian States," Economics Papers from University Paris Dauphine 123456789/5833, Paris Dauphine University.
  7. Verner, Dorte, 2004. "Making the poor count takes more than counting the poor : A quick poverty assessment of the state of Bahia, Brazil," Policy Research Working Paper Series 3216, The World Bank.
  8. Majumder, Rajarshi, 2008. "Globalisation and Employment: A Prelude," MPRA Paper 12814, University Library of Munich, Germany.
  9. Emma Aisbett, 2007. "Why are the Critics So Convinced that Globalization is Bad for the Poor?," NBER Chapters, in: Globalization and Poverty, pages 33-86 National Bureau of Economic Research, Inc.
  10. Chiara Binelli & Orazio Attanasio, 2010. "Mexico in the 1990s: the Main Cross-Sectional Facts," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 238-264, January.
  11. Richard Walker, 2005. "Superstars and Renaissance Men: Specialization, Market Size and the Income Distribution," CEP Discussion Papers dp0707, Centre for Economic Performance, LSE.
  12. Verner, Dorte, 2004. "Poverty in the Brazilian Amazon: an assessment of poverty focused on the State of Para," Policy Research Working Paper Series 3357, The World Bank.
  13. Marta Castilho & Marta Menéndez & Aude Sztulman, 2014. "Trade Liberalization, Inequality and Poverty in Brazilian States," PSE Working Papers halshs-00967356, HAL.
  14. Piva, Mariacristina, 2004. "The impact of technology transfer on employment and income distribution in developing countries : a survey of theoretical models and empirical studies," ILO Working Papers 366690, International Labour Organization.
  15. Verner, Dorte, 2005. "Poverty in rural and semi-urban Mexico during 1992-2002," Policy Research Working Paper Series 3576, The World Bank.
  16. Ayal Kimhi, 2004. "Growth, Inequality and Labor Markets in LDCs: A Survey," CESifo Working Paper Series 1281, CESifo Group Munich.
  17. World Bank, 2004. "Brazil - Growth and Poverty Reduction in Rio Gande Do Norte: A State Economic Memorandum," World Bank Other Operational Studies 14683, The World Bank.

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