Trade Liberalization, Employment Flows and Wage Inequality in Brazil

Francisco H. G. Ferreira (), Phillippe G. Leite and Wai-Poi, Matthew

No UNU-WIDER Research Paper RP2007/58, Working Papers from World Institute for Development Economic Research (UNU-WIDER)

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. Instead, they appear to have been channelled through substantial employment flows across sectors and formality categories. Changes in the economy-wide skill premium are also important.

Keywords: trade liberalization; inequality; employment flows; Brazil (search for similar items in EconPapers)
Date: 2007
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Working Paper: Trade liberalization, employment flows, and wage inequality in Brazil (2007)
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