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The Role of 'Skill Enhancing Trade' in Brazil: Some Evidence from Microdata

24 Pages Posted: 21 Jun 2009  

Bruno Araujo

Institute of Applied Economic Research (IPEA)

Francesco Bogliacino

National University of Colombia - Department of Economics

Marco Vivarelli

Universita Cattolica del Sacro Cuore, Milano; IZA Institute of Labor Economics

Abstract

Brazil was characterised by a marked process of trade liberalisation in the 1990s, resulting in a dramatic increase in the volumes of exports and imports since the year 2000. Over the same period, the relative demand for skilled labour has increased substantially. To investigate whether these two simultaneous phenomena are linked is the purpose of this paper. More in particular, this study focuses on the impact of trade openness and technology transfer on the relative demand for skilled labour in Brazilian manufacturing firms, using a unique panel database (resulting from merging three different statistical sources) of Brazilian manufacturing firms over the period 1997-2005. Descriptive statistics show that the increase in the relative demand for skilled labour was mainly driven by the within-industry variation, supporting the hypothesis that technology (and in particular technological transfer from richer countries) may have played a role in determining the skill-upgrading of Brazilian manufacturing firms. The econometric results further support this hypothesis. Indeed, the estimations show that domestic capital is a complement of the skilled workers and that imported capital goods clearly act as a skill-enhancing component of trade. Hence, our results support the view that embodied technological change through the importation of capital goods has involved a clear skill-biased impact in Brazilian manufacturing.

Keywords: skill-enhancing trade, skill-bias, panel data, Brazil

JEL Classification: O33, O54, F16

Suggested Citation

Araujo, Bruno and Bogliacino, Francesco and Vivarelli, Marco, The Role of 'Skill Enhancing Trade' in Brazil: Some Evidence from Microdata. IZA Discussion Paper No. 4213. Available at SSRN: https://ssrn.com/abstract=1423329

Bruno Araujo (Contact Author)

Institute of Applied Economic Research (IPEA) ( email )

Av. Pres. Antonio Carlos , 51 - 17 andar
Rio de Janeiro, RJ, 20020-010
Brazil

Francesco Bogliacino

National University of Colombia - Department of Economics ( email )

Carrera 30 Calle 45 Ciudad Universitaria
Bogotá
Colombia

Marco Vivarelli

Universita Cattolica del Sacro Cuore, Milano ( email )

Largo Gemelli 1
Milano, 20123
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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