Trade liberalization, the exchange rate and job flows in Brazil

Eduardo Pontual Ribeiro, Carlos Henrique Corseuil, Daniel Santos, Paulo Furtado, Brunu Amorim, Luciana Servo and André Souza

Journal of Policy Reform, 2004, vol. 7, issue 4, pages 209-223

Abstract: Brazil underwent a large trade liberalization process in the 1990s. Over the period, manufacturing employment decreased significantly, generating public debate on the need to revert liberalization. This paper aims to identify the actual effect of trade liberalization on employment, separating it from exchange rate movements using a gross job flow approach. Our novel dataset covers all sectors and formally registered enterprises, and we use new sector specific exchange rate data. Our estimates suggest that greater openness reduce jobs through increased job destruction, with no effect on job creation, but the exchange rate matters also. Depreciations expand the number of jobs in manufacturing by increasing creation, with no effect on destruction.

Keywords: Trade liberalization; Exchange rate; Gross job flows; Brazil (search for similar items in EconPapers)
Date: 2004
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Persistent link: http://EconPapers.repec.org/RePEc:taf:jpolrf:v:7:y:2004:i:4:p:209-223

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