Trade Liberalization, Employment Flows and Wage Inequality in Brazil

Trade Liberalization, Employment Flows and Wage Inequality in Brazil PDF

Author: Francisco H. G. Ferreira

Publisher:

Published: 2007

Total Pages: 64

ISBN-13:

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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.

Firms and the Decline in Earnings Inequality in Brazil

Firms and the Decline in Earnings Inequality in Brazil PDF

Author: Jorge Alvarez

Publisher: International Monetary Fund

Published: 2017-12-14

Total Pages: 59

ISBN-13: 1484333039

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We document a large decrease in earnings inequality in Brazil between 1996 and 2012. Using administrative linked employer-employee data, we fit high-dimensional worker and firm fixed effects models to understand the sources of this decrease. Firm effects account for 40 percent of the total decrease and worker effects for 29 percent. Changes in observable worker and firm characteristics contributed little to these trends. Instead, the decrease is primarily due to a compression of returns to these characteristics, particularly a declining firm productivity pay premium. Our results shed light on potential drivers of earnings inequality dynamics.

Trade Liberalization and Industry Wage Structure

Trade Liberalization and Industry Wage Structure PDF

Author: Nina Pavcnik

Publisher:

Published: 2010

Total Pages:

ISBN-13:

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Industry affiliation provides an important channel through which trade liberalization can affect worker earnings and wage inequality between skilled and unskilled workers. This empirical study of the impact of the 1988-94 trade liberalization in Brazil on the industry wage structure suggests that although industry affiliation is an important component of worker earnings, the structure of industry wage premiums is relatively stable over time. There is no statistical association between changes in industry wage premiums and changes in trade policy or between industry-specific skill premiums to university graduates and trade policy. Thus trade liberalization in Brazil did not significantly contribute to increased wage inequality between skilled and unskilled workers through changes in industry wage premiums. The difference between these results and those obtained for other countries (such as Colombia and Mexico) provides fruitful ground for studying the conditions under which trade reforms do not have an adverse effect on industry wage differentials.

Trade Liberalization, Wage and Employment Structure

Trade Liberalization, Wage and Employment Structure PDF

Author: Carlos Henrique Leite Corseuil

Publisher:

Published: 2002

Total Pages: 0

ISBN-13:

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This article investigates whether the trade liberalization introduced in Brazil by the end of the 1980s affected the structure of employment and wage. We use data from the manufacturing sector from 1987 to 1998 and found evidences that the higher trade flow affected the inter-industry employment shares and wage premia. We also found that skilled and unskilled workers were differently affected by trade liberalization.

The Impacts of Trade Openness on Employment, Poverty and Inequality

The Impacts of Trade Openness on Employment, Poverty and Inequality PDF

Author: Francisco Carneiro

Publisher:

Published: 2003

Total Pages: 0

ISBN-13:

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This paper investigates the impacts of greater trade openness on employment, poverty and inequality in Brazil. The empirical strategy is based on decomposition analysis exercises to assess the main determinants of current account deficits following trade liberalization as well as output decomposition into private sector demand, public sector expenditures and import substitution. Further to this aggregate analysis, we use a computable general equilibrium model to simulate different policy scenarios and use the results of this modeling approach to create counterfactual microsimulations and assess the impacts of greater trade openness on household income distribution and poverty ratios. Our conclusion is that trade liberalization alone will not be sufficient to significantly reduce poverty and inequality in Brazil.

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