Trade Liberalization and Industry Wage Structure : Evidence from Brazil

By Nina Pavcnik, Andreas Blom, P. Goldberg, Norbert R. Schady. 2004

197 citations recorded by the source corpus.

Industry affiliation provides an important channel through which trade liberalization can affect worker earnings and wage inequality between skilled and unskilled workers. This empirical study of the impact of the 1988-94 trade liberalization in Brazil on the industry wage structure suggests that although industry affiliation is an important component of worker earnings, the structure of industry wage premiums is relatively stable over time. There is no statistical association between changes in industry wage premiums and changes in trade policy or between industry-specific skill premiums to university graduates and trade policy. Thus trade liberalization in Brazil did not significantly contribute to increased wage inequality between skilled and unskilled workers through changes in industry wage premiums. The difference between these results and those obtained for other countries (such as Colombia and Mexico) provides fruitful ground for studying the conditions under which trade reforms do not have an adverse effect on industry wage differentials

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/ca0d4e7e53cd73fcf783d48ce7d2a55460ed0d22

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Citations in the corpus

Economic geography and wages in Brazil: Evidence from micro-data (2010, unknown): “This has led some researchers to use weighted least squares (WLS), using as weights the inverse of the standard error of the wage premium estimates from the first stage (see, for example, Pavcnik et al., 2004).”
Trade, Firms, and Wages: Theory and Evidence (2008, background): “However the industry-level study on Brazil by Pavcnik et al. (2004) and the firm-level study of NAFTA by Daniel Trefler (2004) find insignificant or near zero effects of a decline in output tariffs on wages.”
Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia ☆ (2012, background): “For example, more disaggregated studies found an increase in the skill premium within industries in Mexico following a large currency depreciation (see Verhoogen (2008)), and no association between skill premiums and trade policy in Brazil (see Pavcnik et al (2004)).”
Trade liberalization, employment flows, and wage inequality in Brazil (2007, methodology): “Although these two studies cover the same period, they use different data sets and methodologies, which lead them to focus on different aspects of the same phenomenon.”
Trade and Employment: Stylized Facts and Research Findings (2005, unknown): “Pavcnik at al. (2004) suggest that for Brazil there is no relationship, despite a fairly major trade reform in the early 1990s. Feliciano (2001) also fails to find a significant relationship for Mexico, while, as noted above, Revenga (1997) finds a positive link.”
Firms and the Decline in Earnings Inequality in Brazil (2017, unknown): “When social democrat Fernando Henrique Cardoso became president in 1995, he strengthened this agenda with a reduction of tariff and non-tariff trade barriers to one tenth of their levels in 1987 (Pavcnik et al., 2004).”
The Impact of Trade on Technology and Skill Upgrading Evidence from Argentina (2007, background): “2 See Pavcnik et al (2004) on Brazil, Gindling and Robbins (2001) on Chile and Costa Rica; Attanasio et al (2004) on Colombia, Hanson and Harrison (1999) on Mexico. increased within most industries.”
Distributional Effects of Globalization in Developing Countries (2007, background): “Table 2 reports FDI inflows as a share of GDP in select countries and illustrates that, while the share of FDI in total GDP was below 1% in 1980’s in these countries, it grew to about 3 % in 2000 for Colombia and Mexico, to 4% in Argentina, and 5% in Brazil.”