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Trade liberalization, inequality and poverty in Brazilian states

Author Info

Listed author(s):
  • Marta Castilho

    (Universidade Federal Fluminense - Universidade Federal Fluminense)

  • Marta Menéndez

    (LEDa - DIAL - Laboratoire d'Economie de Dauphine - Equipe Economie de la mondialisation et du développement - Université Paris-Dauphine, LEA - Laboratoire d'Economie Appliquée - INRA - Institut National de la Recherche Agronomique, PSE - Paris School of Economics)

  • Aude Sztulman

    (LEDa - DIAL - Laboratoire d'Economie de Dauphine - Equipe Economie de la mondialisation et du développement - Université Paris-Dauphine)

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.

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Paper provided by HAL in its series Working Papers with number halshs-00574996.

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Date of creation: Sep 2009
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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Keywords: trade liberalization; poverty and inequality; Brazilian states;

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Find related papers by 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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  1. Gonzaga, Gustavo & Menezes Filho, Naercio & Terra, Cristina, 2006. "Trade liberalization and the evolution of skill earnings differentials in Brazil," Journal of International Economics, Elsevier, vol. 68(2), pages 345-367, March.
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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, 08.
  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.
  3. 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.
  4. -, 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.
  5. 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.
  6. Halliday,Timothy & Lederman,Daniel & Robertson,Raymond, 2015. "Tracking wage inequality trends with prices and different trade models : evidence from Mexico," Policy Research Working Paper Series 7471, The World Bank.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. Lin, Faqin & Fu, Dahai, 2016. "Trade, Institution Quality and Income Inequality," World Development, Elsevier, vol. 77(C), pages 129-142.
  12. 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.
  13. Gaddis, Isis & Pieters, Janneke, 2012. "Trade Liberalization and Female Labor Force Participation: Evidence from Brazil," IZA Discussion Papers 6809, Institute for the Study of Labor (IZA).

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