The Impacts of Trade Openness on Employment, Poverty and Inequality: The Case of Brazil

Catholic University Working Paper Series No. 09/02

28 Pages Posted: 20 Jan 2003

See all articles by Francisco Carneiro

Francisco Carneiro

The World Bank

Jorge Arbache

University of Brasilia - Department of Economics

Date Written: September 2002

Abstract

This paper investigates the impacts of greater trade openness on employment, poverty and inequality in Brazil. The empirical strategy is based on decomposition analysis exercises to assess the main determinants of current account deficits following trade liberalization as well as output decomposition into private sector demand, public sector expenditures and import substitution. Further to this aggregate analysis, we use a computable general equilibrium model to simulate different policy scenarios and use the results of this modeling approach to create counterfactual microsimulations and assess the impacts of greater trade openness on household income distribution and poverty ratios. Our conclusion is that trade liberalization alone will not be sufficient to significantly reduce poverty and inequality in Brazil.

Keywords: Trade liberalization, poverty, inequality

JEL Classification: F14, J24, J31

Suggested Citation

Carneiro, Francisco Galrao and Arbache, Jorge, The Impacts of Trade Openness on Employment, Poverty and Inequality: The Case of Brazil (September 2002). Catholic University Working Paper Series No. 09/02. Available at SSRN: https://ssrn.com/abstract=352300 or http://dx.doi.org/10.2139/ssrn.352300

Francisco Galrao Carneiro (Contact Author)

The World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Jorge Arbache

University of Brasilia - Department of Economics ( email )

Campus Universitário Darcy Ribeiro
Asa Norte
Brasília, Distrito Federal 70910-900
Brazil
+ 55 61 8194 4529 (Phone)

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