Local multiplier effect of the tradable sector on the Brazilian labor market

Roberta Moraes Rocha () and Breno Caldas Araújo ()
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Roberta Moraes Rocha: PPGECON-UFPE, PPGGES-UFPE, PPGIT-UFPE
Breno Caldas Araújo: Bacharel em Biomedicina (2010) – UFPE

Letters in Spatial and Resource Sciences, 2021, vol. 14, issue 3, No 4, 269-286

Abstract: Abstract The industrial sector has significant economic importance to the national and local economy, especially because it accounts for a significant portion of national employment and generates a multiplier effect on other economic sectors that goes beyond regional and national geographical boundaries. For these reasons, among others, the sector is often targeted by public policies to encourage regional economic growth. Based on Bartik (Bartik, T.J.: Who benefits from state and local economic development policies? W.E. Upjohn Institute for Employment Research (1991)) and Moretti (Moretti, Am. Econ. Rev. 100:1–7, 2010), using data from the demographic censuses conducted by the Brazilian Institute of Geography and Statistics (IBGE) and the Annual Report of Social Information (RAIS) tallied by the Economy Ministry for the years 1991, 2000 and 2010, we estimate the local employment multiplier of the tradable sector on the local labor market. The results indicate that for each job generated by the industrial sector, on average there is a reduction of at 2.6 unoccupied people, and 8 jobs are generated in the non-tradable sector. These results suggest that part of the multiplier effect is internalized by the local economy, since that the impact on unoccupied people is less than job creation.

Keywords: Local multipliers; Industrial employment; Bartik IV; Labor market (search for similar items in EconPapers)
JEL-codes: R1 R12 R23 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s12076-021-00278-1

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