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Economic Geography and Wages in Brazil: Evidence from Micro-Data

  • Thibault Fally

    (PSE – Paris School of Economics)

  • Rodrigo Paillacar

    (CES – Université de Paris 1)

  • Cristina Terra

    (THEMA – Université de Cergy-Pontoise, EPGE – Fundação Getulio Vargas)

This paper estimates the impact of market and supplier access on wage disparities across Brazilian states, incorporating the control of individual characteristics to the new economic geography methodology. We estimate market and supplier access disaggregated by industry, and we compute separately access to international and internal markets. We find a strong correlation between market access and wages differentials, even after controlling for individual characteristics, firm productivity, the source of market access (international, national or local), and using instrumental variables. Furthermore, market access turns out to be more important than supplier access.

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Paper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2008-23.

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Date of creation: 2008
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Handle: RePEc:ema:worpap:2008-23
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