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The impact of trade liberalisation on the informal sector in Brazil

Author

Listed:
  • Fabio Veras Soares

    () (International Poverty Centre)

Abstract

We assess whether or not the trade liberalisation process in Brazil had any effect on both the reduction in the wage differential between registered and non-registered (roughly formal and informal) workers and the fall in the proportion of registered workers. We discuss the channels through which trade liberalisation could affect these two variables and put forward three empirical approaches to test the existence of any correlation between them. Our results suggest that the fall in the wage gap between registered and non-registered workers in the manufacturing sector was affected by trade-related variables, particularly, by the import penetration ratio. However, we do not find robust evidence that trade liberalisation had a substantial effect on the fall in the proportion of registered workers.

Suggested Citation

  • Fabio Veras Soares, 2005. "The impact of trade liberalisation on the informal sector in Brazil," Working Papers 7, International Policy Centre for Inclusive Growth.
  • Handle: RePEc:ipc:wpaper:7
    as

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    File URL: http://www.ipc-undp.org/pub/IPCWorkingPaper7.pdf
    File Function: First version, 2005
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    Citations

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    Cited by:

    1. Mark Weisbrot & Jake Johnston & Stephan Lefebvre, 2014. "The Brazilian Economy in Transition: Macroeconomic Policy, Labor and Inequality," CEPR Reports and Issue Briefs 2014-14, Center for Economic and Policy Research (CEPR).
    2. Nihar Shembavnekar, 2015. "Tariff Liberalisation, Labour Market Flexibility and Employment: Evidence from India," Working Paper Series 8115, Department of Economics, University of Sussex.
    3. Matthew Embrey & Guillaume R. Frechette & Sevgi Yuksel, 2016. "Cooperation in the Finitely Repeated Prisoner's Dilemma," Working Paper Series 8616, Department of Economics, University of Sussex.
    4. Bosch, Mariano & Goñi-Pacchioni, Edwin & Maloney, William, 2012. "Trade liberalization, labor reforms and formal–informal employment dynamics," Labour Economics, Elsevier, vol. 19(5), pages 653-667.

    More about this item

    Keywords

    Trade Liberalisation; Wage differential; Informal Sector; Developing Countries;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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