Sugar Prices, Labour Income and Poverty in Brazil

40 Pages Posted: 8 Oct 2006

See all articles by Ekaterina Krivonos

Ekaterina Krivonos

United Nations Commission for Latin America and the Caribbean

Marcelo Olarreaga

University of Geneva; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: April 2006

Abstract

This paper assesses the impact that a potential liberalization of sugar regimes in OECD countries could have on household labor income and poverty in Brazil. The authors first estimate the extent of price transmission from world markets to 11 Brazilian states to capture the fact that some local markets may be relatively more isolated from changes in world prices. They then simultaneously estimate the impact that changes in domestic sugar prices have on regional wages and employment depending on worker characteristics. Finally, they measure the impact on household income of a 10 percent increase in world sugar prices. Results suggest that workers in the sugar sector and in sugar-producing regions have better employment opportunities and experience larger wage increases. More interestingly, households at the top of the income distribution experience larger income gains due to higher wages, whereas households at the bottom of the distribution experience larger income gains due to movements out of unemployment.

Suggested Citation

Krivonos, Ekaterina and Olarreaga, Marcelo, Sugar Prices, Labour Income and Poverty in Brazil (April 2006). World Bank Policy Research Working Paper No. 3874. Available at SSRN: https://ssrn.com/abstract=935968

Ekaterina Krivonos (Contact Author)

United Nations Commission for Latin America and the Caribbean ( email )

Marcelo Olarreaga

University of Geneva ( email )

40 Boulevard du Pont-d'Arve
Genève, CH - 1205
Switzerland

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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