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Trade Liberalization and the Skill Premium: A Local Labor Markets Approach

Listed author(s):
  • Rafael Dix-Carneiro
  • Brian K. Kovak
Registered author(s):

    We develop a specific-factors model of regional economies that includes two types of workers, skilled and unskilled. The model delivers a simple equation relating trade-induced local shocks to changes in local skill premia. We apply the methodology to Brazil's early 1990s trade liberalization and find statistically significant but modest effects of liberalization on the evolution of the skill premium between 1991 and 2010. The methodology uses widely available household survey data and can easily be applied to other countries and liberalization episodes.

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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 20912.

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    Date of creation: Jan 2015
    Publication status: published as Rafael Dix-Carneiro & Brian K. Kovak, 2015. "Trade Liberalization and the Skill Premium: A Local Labor Markets Approach," American Economic Review, vol 105(5), pages 551-557.
    Handle: RePEc:nbr:nberwo:20912
    Note: DEV ITI LS
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    1. Costa, Francisco & Garred, Jason & Pessoa, João Paulo, 2016. "Winners and losers from a commodities-for-manufactures trade boom," Journal of International Economics, Elsevier, vol. 102(C), pages 50-69.
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