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.

Keywords:
Trade opening, structural change; productivity; unemployment