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The impact of trade liberalisation on the informal sector in Brazil

Author

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  • 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
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    File URL: http://www.ipc-undp.org/pub/IPCWorkingPaper7.pdf
    File Function: First version, 2005
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    References listed on IDEAS

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    4. Luca Pellerano and Valentina Barca, 2016. "The conditions for conditionality in cash transfers," One Pager 317, International Policy Centre for Inclusive Growth.
    5. Schady, Norbert & Araujo, Maria Caridad, 2006. "Cash transfers, conditions, school enrollment, and child work : evidence from a randomized experiment in Ecuador," Policy Research Working Paper Series 3930, The World Bank.
    6. Armando Barrientos, 2013. "Human Development Income Transfers in the Longer Term," One Pager 224, International Policy Centre for Inclusive Growth.
    7. World Bank, 2015. "The State of Social Safety Nets 2015," World Bank Publications, The World Bank, number 22101.
    8. Richard Akresh & Damien de Walque & Harounan Kazianga, 2013. "Cash Transfers and Child Schooling: Evidence from a Randomized Evaluation of the Role of Conditionality," Economics Working Paper Series 1301, Oklahoma State University, Department of Economics and Legal Studies in Business.
    9. Katia Covarrubias & Benjamin Davis & Paul Winters, 2012. "From protection to production: productive impacts of the Malawi Social Cash Transfer scheme," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 4(1), pages 50-77, March.
    Full references (including those not matched with items on IDEAS)

    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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