Trade opening, productivity and employment in Brazil
Abstract
The present article proposes the reevaluation of productivity growth before
and after the Brazilian commercial reopening in the 1990s. To understand how the different
sectors behave through this change, an exercise of productivity decomposition is made. The
main contribution of this study is in the incorporation of the unemployed sector into the
analysis, which helps to recognize how the opening harmed workers that were dislocated
either to low productivity sectors or to inactivity. The study shows that these negative effects
on the job market were huge, resulting in the fall of the average productivity growth of
workers when compared to the pre-opening period.
JEL Classification: J24; O4.
Keywords: Trade opening structural change productivity unemployment