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An empirical model of diversification cones and wage inequality for the states of Brazil

Author

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  • Eleydiane Maria Gomes Vale
  • João Mário deSantos De Frnança

Abstract

The objective of this article is to join the discussion in the area of international trade, the so-called: diversification cones model, to provide evidence that it is robust in explaining differences in wages also for developing countries. We propose an application of the model created by Kiyota (2012), which separates Brazilian states into two cones. This is accomplished through an ISUR econometric model with eighteen manufacturing industries and two annual samples, 1997 and 2007. Wage differences between cones are measured, and salary equation showed to be crucial for the fit of the model.

Suggested Citation

  • Eleydiane Maria Gomes Vale & João Mário deSantos De Frnança, 2017. "An empirical model of diversification cones and wage inequality for the states of Brazil," International Economics, CEPII research center, issue 152, pages 55-62.
    • Handle: RePEc:cii:cepiie:2017-q4-152-5
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    More about this item

    Keywords

    Diversification cones; Wage inequality; Development paths;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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