Trade liberalization and labor market adjustment in Brazil

Nina Pavcnik, Andreas Blom, Pinelopi Goldberg and Norbert Schady

No 2982, Policy Research Working Paper Series from The World Bank

Abstract: The authors study the impact of the 1988-94 trade liberalization in Brazil on wage distribution. They explore three main channels through which trade liberalization could have affected wage distribution: (1) increasing returns to skilled workers because of Hecksher-Ohlin adjustments to trade policy; (2) trade-induced skill-biased technological change; and (3) changes in industry wage premiums. The results suggest that trade reform inBrazil did contribute to the growing skill premium through skill-biased technological change, which was partially instigated by increased foreign competition. The authors also find that sector-specific returns to skill increased more in sectors with bigger tariff reductions. But they find little support for Hecksher-Ohlin type adjustments to trade reform. Overall, the effects of trade reform on wage inequality seem relatively small.

Keywords: Water and Industry; Municipal Financial Management; Health Monitoring&Evaluation; Environmental Economics&Policies; Public Health Promotion; Municipal Financial Management; Health Monitoring&Evaluation; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Environmental Economics&Policies; Water and Industry (search for similar items in EconPapers)
Date: 2003-03-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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