Trade Liberalization, Employment Flows, and Wage Inequality in Brazil

56 Pages Posted: 20 Apr 2016

See all articles by Francisco H. G. Ferreira

Francisco H. G. Ferreira

World Bank - Development Research Group (DECRG)

Phillippe G. Leite

World Bank - Research Department

Matthew Wai-Poi

Columbia University

Date Written: January 1, 2007

Abstract

Using nationally representative, economywide data, this paper investigates the relative importance of trade-mandated effects on industry wage premia; industry and economywide skill premia; 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 toward a reduction in wage inequality. These effects have not occurred through changes in industry-specific (wage or skill) premia. Instead, they appear to have been channeled through substantial employment flows across sectors and formality categories. Changes in the economywide skill premium are also important.

Keywords: Economic Theory & Research, Free Trade, Labor Markets, Trade Policy, Trade Law

Suggested Citation

Ferreira, Francisco H. G. and Leite, Phillippe G. and Wai-Poi, Matthew, Trade Liberalization, Employment Flows, and Wage Inequality in Brazil (January 1, 2007). World Bank Policy Research Working Paper No. 4108, Available at SSRN: https://ssrn.com/abstract=956488

Francisco H. G. Ferreira (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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Phillippe G. Leite

World Bank - Research Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Matthew Wai-Poi

Columbia University

3022 Broadway
New York, NY 10027
United States

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