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Trade Liberalization, The Exchange Rate And Job And Worker Flows In Brazil

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  • Eduardo Pontual Ribeiro
  • Carlos H. Corseuil
  • Daniel Santos
  • Paulo Furtado
  • Brunu Amorim
  • Luciana Servo
  • André Souza

Abstract

Over the 1990's Brazil experienced a massive trade liberalization and wide variation in the real exchange rate. At the same time, employment growth was small and in manufacturing there was a significant reduction in total manufacturing. The main goal of this article is to idntify the effects of the exchange rate and trade liberalization on job and worker flows in Brazil. Using a novel sector exchange rate measure, our results suggest that a depreciation of the exchange rate affects net employment growth by increasing job creation and hires, with no effect on job reallocation. Tariffs have no effect on job or worker flows, while import penetration decrease job growth by increasing job destruction. The results suggest that the echange rate have a very important role on job and worker flows, even after controlling for openess and sector specificities.

Suggested Citation

  • Eduardo Pontual Ribeiro & Carlos H. Corseuil & Daniel Santos & Paulo Furtado & Brunu Amorim & Luciana Servo & André Souza, 2004. "Trade Liberalization, The Exchange Rate And Job And Worker Flows In Brazil," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32nd Brazilian Economics Meeting] 153, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    • Handle: RePEc:anp:en2004:153
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    Cited by:

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    2. Veeramani, Choorikkad & Banerjee, Purna, 2022. "Exchange rate fluctuations, labour laws, and gender differences in job flows: Analysis of manufacturing industries across Indian states," World Development, Elsevier, vol. 152(C).
    3. 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.
    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. 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. 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.
    7. Naércio Aquino Menezes Filho & Marc-Andreas Muendler, 2007. "Labor Reallocation in Response to Trade Reform," CESifo Working Paper Series 1936, CESifo.
    8. 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.
    9. 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.
    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.
    11. Ligia Melo & Carlos Ballesteros, 2014. "The impact of external factors on job creation and destruction in the Colombian manufacturing sector," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 81, pages 155-186, Julio - D.
    12. Chama CHIPETA & Daniel Francois MEYER, 2018. "Trade Openness, FDI and Exchange Rate Effects on Job Creation in South Africa's Tradable Sectors," Journal of Economics and Behavioral Studies, AMH International, vol. 10(4), pages 197-212.
    13. Chipeta Chama & Meyer Daniel Francois & Muzindutsi Paul-Francois, 2017. "The Effect of Exchange Rate Movements and Economic Growth on Job Creation," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 62(2), pages 20-41, August.
    14. Purna Banerjee & C. Veeramani, 2019. "Export competitiveness, labour laws, and gender differences in job dynamics: Analysis of manufacturing industries across Indian States," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2019-035, Indira Gandhi Institute of Development Research, Mumbai, India.
    15. Ojonugwa Usman & Osama Mohammed Elsalih, 2018. "Testing the Effects of Real Exchange Rate Pass-Through to Unemployment in Brazil," Economies, MDPI, vol. 6(3), pages 1-13, September.
    16. Mourad Zmami & Ousama Ben-Salha, 2015. "Exchange rate movements and manufacturing employment in Tunisia: Do different categories of firms react similarly?," Economic Change and Restructuring, Springer, vol. 48(2), pages 137-167, May.
    17. Almeida, Rita K. & Poole, Jennifer P., 2017. "Trade and labor reallocation with heterogeneous enforcement of labor regulations," Journal of Development Economics, Elsevier, vol. 126(C), pages 154-166.
    18. Melo, Ligia & Ballesteros, Carlos, 2014. "Impacto de los factores externos sobre la creación y destrucción de empleo en el sector manufacturero colombiano," Revista Lecturas de Economía, Universidad de Antioquia, CIE, issue 81, pages 155-186, April.

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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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