Trade Liberalization and Labor Market Adjustment in Brazil
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 be...
| Main Authors: | , , , |
|---|---|
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/03/2166848/trade-liberalization-labor-market-adjustment-brazil http://hdl.handle.net/10986/19038 |
| Summary: | 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 in Brazil 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. |
|---|