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Trade Liberalization, Employment Flows and Wage Inequality in Brazil

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  • Phillippe Leite
  • Matthew Wai-Poi
  • Francisco H.G. Ferreira

Abstract

Using nationally representative, economy-wide data, this paper investigates the relative importance of trade-mandated effects on industry wage premiums; industry and economy-wide skill premiums; and employment flows in accounting for changes in the wage distribution in Brazil during the 1988-95 trade liberalization. Unlike in other Latin American countries, trade liberalization appears to have made a significant contribution towards a reduction in wage inequality. These effects have not occurred through changes in industry-specific (wage or skill) premiums.

Suggested Citation

  • Phillippe Leite & Matthew Wai-Poi & Francisco H.G. Ferreira, 2007. "Trade Liberalization, Employment Flows and Wage Inequality in Brazil," WIDER Working Paper Series RP2007-58, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:rp2007-58
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    References listed on IDEAS

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    Cited by:

    1. Viviane Azevedo & Cesar Bouillon, 2009. "Social Mobility in Latin America: A Review of Existing Evidence," Research Department Publications 4634, Inter-American Development Bank, Research Department.
    2. Mehta, Aashish & Hasan, Rana, 2012. "The effects of trade and services liberalization on wage inequality in India," International Review of Economics & Finance, Elsevier, vol. 23(C), pages 75-90.
    3. Margarida Bandeira Morais & Julia Swart & Jacob Arie Jordaan, 2021. "Economic Complexity and Inequality: Does Regional Productive Structure Affect Income Inequality in Brazilian States?," Sustainability, MDPI, Open Access Journal, vol. 13(2), pages 1-23, January.
    4. Arias, Javier & Artuc, Erhan & Lederman, Daniel & Rojas, Diego, 2018. "Trade, informal employment and labor adjustment costs," Journal of Development Economics, Elsevier, vol. 133(C), pages 396-414.
    5. Ferreira, Francisco H.G. & Leite, Phillippe G. & Ravallion, Martin, 2010. "Poverty reduction without economic growth?: Explaining Brazil's poverty dynamics, 1985-2004," Journal of Development Economics, Elsevier, vol. 93(1), pages 20-36, September.
    6. Francisco Ferreira, 2010. "Distributions in motion: Economic growth, inequality, and poverty dynamics," Working Papers 183, ECINEQ, Society for the Study of Economic Inequality.
    7. Gasparini, Leonardo & Galiani, Sebastian & Cruces, Guillermo & Acosta, Pablo A., 2011. "Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework, 1990-2010," IZA Discussion Papers 6244, Institute of Labor Economics (IZA).
    8. Leonardo Gasparini & Nora Lustig, 2011. "The Rise and Fall of Income Inequality in Latin America," Working Papers 1110, Tulane University, Department of Economics.
    9. Aadil Ahmad Ganaie & Sajad ahmad Bhat & Bandi Kamaiah, 2018. "Macro-determinants of Income Inequality: An Empirical Analysis in case of India," Economics Bulletin, AccessEcon, vol. 38(1), pages 309-325.
    10. Yang Wang, 2015. "Education Expansion and Decline in Tertiary Premium in Brazil: 1995-2013," Working Papers 1525, Tulane University, Department of Economics.
    11. Gerardo Esquivel, 2011. "The Dynamics of Income Inequality in Mexico since NAFTA," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2011), pages 155-188, August.
    12. Ana Abras & Renata Narita, 2016. "Informalidade, Desigualdade E Pagamento Por Performance No Brasil," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 230, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    13. Ferreira, Francisco H.G. & Ravallion, Martin, 2008. "Global poverty and inequality : a review of the evidence," Policy Research Working Paper Series 4623, The World Bank.
    14. Prabir De & Ajitava Raychaudhuri, 2013. "Trade facilitation and poverty reduction in Asia and the Pacific: A case study of a South Asian economic corridor," ARTNeT Working Papers 131, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    15. Nora Lustig & Luis F. Lopez-Calva & Eduardo Ortiz-Juarez, 2011. "The Decline in Inequality in Latin America: How Much, Since When and Why," Working Papers 1118, Tulane University, Department of Economics.
    16. repec:unu:wpaper:wp2012-12 is not listed on IDEAS
    17. Flôres Junior, Renato Galvão, 2008. "Trade and poverty in latin american countries: conceptual and methodological challenges," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 675, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    18. Engbom, Niklas & Gonzaga, Gustavo & Moser, Christian & Olivieri, Roberta, 2021. "Earnings Inequality and Dynamics in the Presence of Informality: The Case of Brazil," CEPR Discussion Papers 16117, C.E.P.R. Discussion Papers.
    19. repec:unu:wpaper:wp2012-03 is not listed on IDEAS
    20. 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.
    21. Jayanthakumaran, Kankesu & Sangkaew, Piyapong & O’Brien, Martin, 2013. "Trade liberalisation and manufacturing wage premiums: Evidence from Thailand," Journal of Asian Economics, Elsevier, vol. 29(C), pages 15-23.
    22. Bui, Anh Tuan & Nguyen, Cuong Viet & Pham, Thu Phuong, 2019. "Impact of foreign investment on household welfare: Evidence from Vietnam," Journal of Asian Economics, Elsevier, vol. 64(C), pages 1-1.
    23. Nora Lustig & Jaime Ros, 2011. "Latin America's Economic Challenges: Lessons for Emerging Economies," Working Papers 1112, Tulane University, Department of Economics.
    24. Sergio Firpo & Renan Pieri & Rafaela Nogueira, 2020. "Inclusive growth without structural transformation?: The case of Brazil," WIDER Working Paper Series wp-2020-58, World Institute for Development Economic Research (UNU-WIDER).

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