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Trade Liberalization, Inequality and Poverty in Brazilian States

Author

Listed:
  • Marta Menéndez

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Aude Sztulman

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Marta Castilho

    (UFF - Universidade Federal Fluminense [Rio de Janeiro])

Abstract

This paper studies the impact of trade liberalization and international trade on household income inequality and poverty using detailed micro-data across Brazilian states, from 1987 to 2005. Results suggest that Brazilian states that were more exposed to tariff cuts experienced smaller reductions in household poverty and inequality. If significance of results on Brazilian states depends on the choice of poverty and inequality indicators, robust and contrasting results emerge when we disaggregate into rural and urban areas within states. Trade liberalization contributes to poverty and inequality increases in urban areas and may be linked to inequality declines in rural areas (no significant effect on rural poverty appears from our study). In terms of observed integration to world markets, import penetration plays a similar role as trade liberalization for Brazilian states as a whole. On the contrary, rising export exposure appears to have significantly reduced both measures of household welfare.

Suggested Citation

  • Marta Menéndez & Aude Sztulman & Marta Castilho, 2012. "Trade Liberalization, Inequality and Poverty in Brazilian States," Post-Print hal-01617520, HAL.
    • Handle: RePEc:hal:journl:hal-01617520
    DOI: 10.1016/j.worlddev.2011.09.018
    Note: View the original document on HAL open archive server: https://hal.science/hal-01617520
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    More about this item

    Keywords

    Poverty; Trade liberalization; Brazil states; Inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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