Trade liberalization and the evolution of skill earnings differentials in Brazil

Gustavo Gonzaga, Naércio Aquino Menezes Filho and Cristina Terra
Authors registered in the RePEc Author Service: Naercio Menezes-Filho

No 585, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: Skilled labor earnings differentials decreased during the trade liberalization implemented in Brazil from 1988 to 1995. This paper investigates the role of trade liberalization in explaining these relative earnings movements. We perform several independent empirical exercises that check the traditional trade transmission mechanism, using disaggregated data on tariffs, prices, earnings, employment and skill intensity. We find that: i) employment shifted from skilled to unskilled intensive sectors, and each sector increased its relative share of skilled labor; ii) relative prices fell in skill intensive sectors; iii) tariff changes across sectors were not related to skill intensities, but the pass-through from tariffs to prices was larger in skill intensive sectors; iv) the decline in skilled earnings differentials mandated by the price variation predicted by trade was even larger than the observed one. The results are compatible with trade liberalization accounting for the observed relative earnings changes in Brazil. They also highlight the importance of considering the effects of differentiated pass-through from tariffs to prices.

Date: 2005-04-01
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://repositorio.fgv.br/bitstreams/6c8d46e6-943 ... db7c99b332d/download (application/pdf)

Related works:
Journal Article: Trade liberalization and the evolution of skill earnings differentials in Brazil (2006)
Working Paper: Trade Liberalization and the Evolution of Skill Earnings Differentials in Brazil (2006)
Working Paper: Trade liberalization and the evolution of skill earnings differentials in Brazil (2005)
Working Paper: Trade liberalization and the evolution of skill earnings differentials in Brazil (2002)
Working Paper: Trade liberalization and evolution of skill earnings differentials in Brazil (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fgv:epgewp:585

Access Statistics for this paper

More papers in FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil) Contact information at EDIRC.
Bibliographic data for series maintained by Núcleo de Computação da FGV EPGE ().