Spatial dynamics of labor markets in Brazil

Kenneth M. Chomitz, Daniel Da Mata, Alexandre Ywata de Carvalho and Joao Carlos Magalhaes

No 3752, Policy Research Working Paper Series from The World Bank

Abstract: There was substantial spatial variation in labor market outcomes in Brazil over the 1990s. In 2000, about one-fifth of workers lived in apparently economically stagnant municipios where real wages declined but employment increased faster than the national population growth rate. More than one-third lived in apparently dynamic municipios, experiencing both real wage growth and faster-than-average employment growth. These areas absorbed more than half of net employment growth over the period. To elucidate this spatial variation, the authors estimate spatial labor supply and demand equations describing wage and employment changes of Brazilian municipios. They use Conley's spatial GMM technique to allow for instrumental variable estimation in the presence of spatially autocorrelated errors. The main findings include: (1) a very strong influence of initial workforce educational levels on subsequent wage growth (controlling for possibly confounding variables such as remoteness and climate); (2) evidence of positive spillover effects of own-municipio growth onto neighbors'wage and employment levels; (3) an exodus from farming areas; (4) relatively elastic response of wages to an increase in labor supply; and (5) evidence of a local multiplier effect from government transfers.

Keywords: Labor Markets; Economic Theory&Research; Economic Growth; Municipal Financial Management; Achieving Shared Growth (search for similar items in EconPapers)
Date: 2005-10-01
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Spatial Dynamics of Labor Markets in Brazil (2015)
Working Paper: Spatial Dynamics of Labor Markets in Brazil (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:3752

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