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Trade liberalization, employment flows, and wage inequality in Brazil
 
Author:Ferreira, Francisco H. G.; Leite, Phillippe G.; Wai-Poi, Matthew ; Collection Title:Policy, Research working paper ; no. WPS 4108
Country:Brazil; Date Stored:2007/01/09
Document Date:2007/01/01Document Type:Policy Research Working Paper
SubTopics:Economic Theory & Research; Free Trade; Trade Policy; Labor Markets; Trade LawLanguage:English
Region:Latin America & CaribbeanReport Number:WPS4108
Volume No:1 of 1  

Summary: Using nationally representative, economywide data, this paper investigates the relative importance of trade-mandated effects on industry wage premia; industry and economywide skill premia; 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 toward a reduction in wage inequality. These effects have not occurred through changes in industry-specific (wage or skill) premia. Instead, they appear to have been channeled through substantial employment flows across sectors and formality categories. Changes in the economywide skill premium are also important.

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