China Shock and Female Labor Market Participation in Brazil

Abstract

Brazil was a successful case of economic growth based on import substitution. Recently, with the China shock, the country’s economy has been exposed to greater competition. In a similar period, an increase of 12 percent in the proportion of formalized female workerstook place in the Brazilian labor market. This paper explores the variation of China Shock between Brazilian local labor markets (or microregions) to identify whether the expansion of Chinese participation in international trade was able to improve the women’s conditions in the Brazilian labor market between 2000 and 2013 measured by the proportion of women formalized, and the wage ratio of female to male workers. It is the first study to assess how the two channels of China shock, the influx of Chinese imports in Brazil, and the increase in Chinese demand for Brazilian exports, affected the outcomes of formal Brazilian women, with data from the Brazilian labor market (RAIS and Census) and information on trade flows between Brazil and China (BACI database).