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Assessment of the distributive impact of national trade reforms in Brazil

Author

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  • Fernando Borraz
  • Daniel Ferrés
  • Máximo Rossi

Abstract

This paper quantifies the distributional and poverty effects of trade liberalization in Brazil using household survey data. We estimate the consumption and labor impact of Mercosur trade reform following the methodology suggested by Porto (J Int Econ 70:140–160, 2006 ) and Nicita (J Dev Econ 89(1):19–27, 2009 ). Results show that trade liberalization had a pro-poor effect in Brazil. This result is largely explained by two major observations: the fact that consumption good prices decreased after Brazil entered Mercosur and a close to zero labor income effect. We find that poverty decreased after national trade liberalization (both for women and men). Additionally, we obtained no significant inequality effects after national trade reforms. Copyright Springer Science+Business Media, LLC. 2013

Suggested Citation

  • Fernando Borraz & Daniel Ferrés & Máximo Rossi, 2013. "Assessment of the distributive impact of national trade reforms in Brazil," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(2), pages 215-235, June.
    • Handle: RePEc:kap:jecinq:v:11:y:2013:i:2:p:215-235
    DOI: 10.1007/s10888-011-9213-0
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    1. Gonzaga, Gustavo & Menezes Filho, Naercio & Terra, Cristina, 2006. "Trade liberalization and the evolution of skill earnings differentials in Brazil," Journal of International Economics, Elsevier, vol. 68(2), pages 345-367, March.
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    4. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    5. Glenn W. Harrison & Thomas F. Rutherford & David G. Tarr & Angelo Gurgel, 2014. "Trade Policy and Poverty Reduction in Brazil," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 10, pages 225-253, World Scientific Publishing Co. Pte. Ltd..
    6. Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003. "The response of the informal sector to trade liberalization," Journal of Development Economics, Elsevier, vol. 72(2), pages 463-496, December.
    7. Thomas W. Hertel & Paul V. Preckel & John A.L. Cranfield & Maros Ivanic, 2003. "Multilateral Trade Liberalization and Poverty in Brazil and Chile," Economie Internationale, CEPII research center, issue 94-95, pages 201-233.
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    9. Leonardo Gasparini & Guillero Cruces & Leopoldo Tornarolli, 2011. "Recent Trends In Income Inequality In Latin America," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 147-201, January.
    10. Porto, Guido G., 2006. "Using survey data to assess the distributional effects of trade policy," Journal of International Economics, Elsevier, vol. 70(1), pages 140-160, September.
    11. Nicita, Alessandro, 2009. "The price effect of tariff liberalization: Measuring the impact on household welfare," Journal of Development Economics, Elsevier, vol. 89(1), pages 19-27, May.
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    Cited by:

    1. Margarida Bandeira Morais & Julia Swart & Jacob Arie Jordaan, 2021. "Economic Complexity and Inequality: Does Regional Productive Structure Affect Income Inequality in Brazilian States?," Sustainability, MDPI, vol. 13(2), pages 1-23, January.
    2. Inma Martínez-Zarzoso & Leila Baghdadi & Hendrik Wiard Kruse, 2016. "Is Tunisian Trade Policy Pro-Poor?," Working Papers 1033, Economic Research Forum, revised Aug 2016.
    3. Margarida Bandeira Morais & J. Swart & J.A. Jordaan, 2018. "Economic Complexity and Inequality: Does Productive Structure Affect Regional Wage Differentials in Brazil?," Working Papers 18-11, Utrecht School of Economics.
    4. Giordano, Paolo & Li, Kun, 2012. "An Updated Assessment of the Trade and Poverty Nexus in Latin America," IDB Publications (Working Papers) 4209, Inter-American Development Bank.

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    More about this item

    Keywords

    Inequality; Trade reform; Poverty; Brazil; F14; F16; D30; Q17;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • D30 - Microeconomics - - Distribution - - - General
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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