Working Paper: NBER ID: w23595
Authors: Rafael Dixcarneiro; Brian K. Kovak
Abstract: We use both longitudinal administrative data and cross-sectional household survey data to study the margins of labor market adjustment following Brazil's early 1990s trade liberalization. We document how workers and regional labor markets adjust to trade-induced changes in local labor demand, examining various adjustment margins, including earnings and wage changes; interregional migration; shifts between tradable and nontradable employment; and shifts between formal employment, informal employment, and non-employment. Our results provide insight into the regional labor market effects of trade, and have important implications for policies that address informal employment and that assist trade-displaced workers.
Keywords: trade liberalization; labor market; Brazil; informal employment; regional adjustment
JEL Codes: F14; F16; J46; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Tariff reductions (F13) | Formal employment duration (C41) |
| Tariff reductions (F13) | Transition to nontradable sector employment (F16) |
| Transition to nontradable sector employment (F16) | Employment compensation (J65) |
| Tariff reductions (F13) | Nonemployment and informal employment (J46) |
| Nonemployment and informal employment (J46) | Informal sector earnings (J46) |
| Tariff reductions (F13) | Formal sector earnings (J31) |