Economics at your fingertips  

Competition and the racial wage gap: Evidence from Brazil

Guilherme Hirata and Rodrigo Soares ()

Journal of Development Economics, 2020, vol. 146, issue C

Abstract: We look at the natural experiment represented by the Brazilian trade liberalization from the early 1990s to study the effect of increased competition in the market for final goods on the racial wage gap. We focus on local labor markets as the unit of analysis and use the initial structure of employment to calculate the relevant tariff reduction from the perspective of each local labor market. We show that the conditional racial wage gap fell more between 1991 and 2000 in regions associated with larger reductions in tariffs, or, in other words, in regions that experienced larger increases in exposure to international competition. A reduction in tariffs equivalent to the average observed in the sample was associated with a reduction in the racial wage gap of 18%. Our results are broadly consistent with theories of employer discrimination that predict that reductions in pure economic rents should lead to reductions in labor market discrimination.

Keywords: Discrimination; Racial wage gap; Competition; Labor market; Trade reform; Brazil (search for similar items in EconPapers)
JEL-codes: F66 J31 J71 J78 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.jdeveco.2020.102519

Access Statistics for this article

Journal of Development Economics is currently edited by M. R. Rosenzweig

More articles in Journal of Development Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-10-08
Handle: RePEc:eee:deveco:v:146:y:2020:i:c:s0304387820300948