is a researcher at the Institute for Applied Economic Research (IPEA), Brazil. Carlos Henrique Corseuil is a researcher at the Institute for Applied Economic Research (IPEA), Brazil. This chapter is a compiled version of Barros, Corseuil and Gonzaga (1999) and Barros, Corseuil, and Bahia (1999). The authors would like to thank Wasmália Bivar for valuable information about the PIM database. We also would like to thank Carmen Pagés, James Heckman, Rosane Mendonça, Gustavo Gonzaga, Ricardo Henriques, and Miguel Foguel for comments on previous versions of this chapter. Finally, we cannot forget to mention the extreme dedication of our team in IPEA involved in this project, especially

No abstract

is a researcher at the Institute for Applied Economic Research (IPEA), Brazil. Carlos Henrique Corseuil is a researcher at the Institute for Applied Economic Research (IPEA), Brazil. This chapter is a compiled version of Barros, Corseuil and Gonzaga (1999) and Barros, Corseuil, and Bahia (1999). The authors would like to thank Wasmália Bivar for valuable information about the PIM database. We also would like to thank Carmen Pagés, James Heckman, Rosane Mendonça, Gustavo Gonzaga, Ricardo Henriques, and Miguel Foguel for comments on previous versions of this chapter. Finally, we cannot forget to mention the extreme dedication of our team in IPEA involved in this project, especially

Brazil underwent a large trade liberalization process in the 1990s. Over the period, manufacturing employment decreased significantly, generating public debate on the need to revert liberalization. This paper aims to identify the actual effect of trade liberalization on employment, separating it from exchange rate movements using a gross job flow approach. Our novel dataset covers all sectors and formally registered enterprises, and we use new sector specific exchange rate data. Our estimates suggest that greater openness reduce jobs through increased job destruction, with no effect on job creation, but the exchange rate matters also. Depreciations expand the number of jobs in manufacturing by increasing creation, with no effect on destruction.Trade liberalization, Exchange rate, Gross job flows, Brazil,

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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The frequency of labor inspections in Brazil increased in the late 1990s. In the years that followed, between 2003 and 2007, formal employment expanded significantly in the country. This paper examines whether these city-level changes in labor inspections could be a significant factor contributing to the increase in the number of formal labor contracts at the city level. We exploit unique administrative data on formal employment on different indicators for job and worker flows-including job creation, destruction, reallocation, accessions, and separations-between 1996 and 2006, and on the intensity of labor inspections, both at the city level. The results show that increases in the enforcement of labor market regulations at the subnational level led to an increase in gross and net formal job creation rates and accession rates in a period when the Brazilian GDP and formal employment were growing and informality rates were declining. In contrast, increases in enforcement of regulations are not significantly correlated with changes in the rate of job destruction. This finding is robust to different specifications and is consistent with a model where formal jobs become more attractive to workers when enforcement of different types of labor regulations increases.

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