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Technology, trade and skills in Brazil: Some evidence from microdata

  • Bruno Cesar Araújo


    (Istituto de Pesquisa Economica Aplicada - IPEA)

  • Francesco Bogliacino


    (Universidad EAFIT and RISE Group, Medellin)

  • Marco Vivarelli


    (DISCE, Università Cattolica)

Brazil was characterised by a marked process of trade liberalisation in the ‘90s, resulting in a dramatic increase in the volumes of exports and imports since the year 2000. Over the same period, the relative demand for skilled labour has increased substantially. To investigate whether these two simultaneous phenomena are linked is the purpose of this paper. More in particular, this study focuses on the possible impact of domestic technology, capital complementarity and trade openness on the relative demand for skilled labour in Brazilian manufacturing firms, using a unique panel database (resulting from merging three different statistical sources) of Brazilian manufacturing firms over the period 1997-2005. Descriptive statistics show that the increase in the relative demand for skilled labour was mainly driven by the within-industry variation, supporting the hypothesis that technology (and in particular technological transfer from richer countries) may have played a role in determining the skill-upgrading of Brazilian manufacturing firms. The econometric results further support this hypothesis. Indeed, the estimations show that domestic technology and capital formation are complements for the skilled workers and that imported capital goods clearly act as a skill-enhancing component of trade.

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Paper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali with number dises1171.

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Length: 21 pages
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:ctc:serie2:dises1171
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  1. Caroli, Eve & Van Reenen, John, 1999. "Skill biased organizational change? Evidence from a panel of British and French establishments," CEPREMAP Working Papers (Couverture Orange) 9917, CEPREMAP.
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  4. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
  5. Terra, Maria Cristina T. & Gonzaga, Gustavo & Menezes Filho, Naércio Aquino, 2002. "Trade Liberalization and the Evolution of Skill Earnings Differentials in Brazil," Economics Working Papers (Ensaios Economicos da EPGE) 457, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  6. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras," NBER Working Papers 5122, National Bureau of Economic Research, Inc.
  7. Almeida, Rita & Fernandes, Ana Margarida, 2006. "Openness and technological innovations in developing countries : evidence from firm-level surveys," Policy Research Working Paper Series 3985, The World Bank.
  8. Van Reenen, John, 1997. "Employment and Technological Innovation: Evidence from U.K. Manufacturing Firms," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 255-84, April.
  9. Donald R. Davis, 1996. "Trade Liberalization and Income Distribution," NBER Working Papers 5693, National Bureau of Economic Research, Inc.
  10. Robert C. Feenstra & Gordon H. Hanson, 1996. "Globalization, Outsourcing, and Wage Inequality," NBER Working Papers 5424, National Bureau of Economic Research, Inc.
  11. Marco Vivarelli, 2002. "Book review," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(6), pages 581-584.
    • A. Sandmo & M. Marquardt & H. Gottinger & U. Faigle & H. Kurz & J. Aubin & M. Vivarelli, 1998. "Book reviews," Journal of Economics, Springer, vol. 67(3), pages 338-351, October.
  12. Robbins, Donald & Gindling, T H, 1999. "Trade Liberalization and the Relative Wages for More-Skilled Workers in Costa Rica," Review of Development Economics, Wiley Blackwell, vol. 3(2), pages 140-54, June.
  13. Aguirregabiria, V & Alonso-Borrego, C, 1997. "Employment Occupational Structure, Technological Capital and Reorganization of Production," UWO Department of Economics Working Papers 9703, University of Western Ontario, Department of Economics.
  14. Menezes Filho, N. A. & Giovannetti, Bruno, 2006. "Trade Liberalization and Demand for Skill in Brazil," Insper Working Papers wpe_57, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
  15. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2008. "Trade Openness and the Demand for Skills: Evidence from Turkish Microdata," IZA Discussion Papers 3887, Institute for the Study of Labor (IZA).
  16. Richard Blundell & Steve Bond, 1999. "GMM estimation with persistent panel data: an application to production functions," IFS Working Papers W99/04, Institute for Fiscal Studies.
  17. Meschi, Elena & Vivarelli, Marco, 2009. "Trade and Income Inequality in Developing Countries," World Development, Elsevier, vol. 37(2), pages 287-302, February.
  18. Gordon H. Hanson & Ann Harrison, 1999. "Trade Liberalization and Wage Inequality in Mexico," ILR Review, Cornell University, ILR School, vol. 52(2), pages 271-288, January.
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