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Trade liberalization, inequality and poverty in Brazilian states

Author

Listed:
  • Marta Castilho

    (UFF - Universidade Federal Fluminense [Rio de Janeiro])

  • Marta Menéndez

    (LEDA-DIAL - Développement, Institutions et Modialisation - LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique, LEA - Laboratoire d'Economie Appliquée - INRA - Institut National de la Recherche Agronomique, PSE - Paris School of Economics)

  • Aude Sztulman

    (LEDA-DIAL - Développement, Institutions et Modialisation - LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique)

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.

Suggested Citation

  • Marta Castilho & Marta Menéndez & Aude Sztulman, 2009. "Trade liberalization, inequality and poverty in Brazilian states," Working Papers halshs-00574996, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00574996
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00574996
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    References listed on IDEAS

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    Cited by:

    1. Laura Policardo & Lionello F. Punzo & Edgar J. Sánchez Carrera, 2016. "Brazil and China: Two Routes of Economic Development?," Review of Development Economics, Wiley Blackwell, vol. 20(3), pages 651-669, August.
    2. -, 2014. "International trade and inclusive development: Building synergies," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 3 edited by Eclac, June.
    3. repec:vrs:ekonom:v:96:y:2017:i:1:p:47-57:n:3 is not listed on IDEAS
    4. Kis-Katos, Krisztina & Sparrow, Robert, 2015. "Poverty, labor markets and trade liberalization in Indonesia," Journal of Development Economics, Elsevier, vol. 117(C), pages 94-106.
    5. -, 2014. "International trade and inclusive development: Building synergies," Colección "La hora de la Igualdad", Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 3 edited by Eclac, July.
    6. repec:spr:weltar:v:154:y:2018:i:1:d:10.1007_s10290-017-0291-3 is not listed on IDEAS
    7. L. Alan Winters & Antonio Martuscelli, 2014. "Trade Liberalization and Poverty: What Have We Learned in a Decade?," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 493-512, October.
    8. Timothy Halliday & Daniel Lederman & Raymond Robertson, 2018. "Tracking wage inequality trends with prices and different trade models: evidence from Mexico," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(1), pages 47-73, February.
    9. Isis Gaddis & Janneke Pieters, 2017. "The Gendered Labor Market Impacts of Trade Liberalization: Evidence from Brazil," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 457-490.
    10. Ghani,Syed Ejaz & Grover,Arti & Kerr,Sari & Kerr,William Robert, 2016. "Will market competition trump gender discrimination in India ?," Policy Research Working Paper Series 7814, The World Bank.
    11. Yoshimichi Murakami, 2018. "Globalization and Income Inequality in Latin America: A Review of Theoretical Developments and Recent Evidence," Discussion Paper Series DP2018-16, Research Institute for Economics & Business Administration, Kobe University, revised Aug 2018.
    12. Paolo Giordano & Kun Li, 2012. "An Updated Assessment of the Trade and Poverty Nexus in Latin America," IDB Publications (Working Papers) 79119, Inter-American Development Bank.
    13. Nazeem ud din & Khalid Zaman & Shagufta Ashraf & Faiza Sajjad & Sundas Saleem & Uzma Raja, 2015. "Quality versus quantity in health care and educational reforms: combating poverty," Quality & Quantity: International Journal of Methodology, Springer, vol. 49(1), pages 267-293, January.
    14. Jérémie Gignoux & Akiko Suwa-Eisenmann, 2017. "The Regional Impact of Trade Liberalization on Households in Egypt, 1999-2012," Working Papers 1109, Economic Research Forum, revised 06 2017.
    15. Lin, Faqin & Fu, Dahai, 2016. "Trade, Institution Quality and Income Inequality," World Development, Elsevier, vol. 77(C), pages 129-142.
    16. Fukase, Emiko, 2013. "Export Liberalization, Job Creation, and the Skill Premium: Evidence from the US–Vietnam Bilateral Trade Agreement (BTA)," World Development, Elsevier, vol. 41(C), pages 317-337.
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    More about this item

    Keywords

    trade liberalization; poverty and inequality; Brazilian states;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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