Regional Effects of Trade Reform: What is the Correct Measure of Liberalization?

Kovak, Brian K.

doi:10.1257/aer.103.5.1960

Cited by 403 publications

(494 citation statements)

References 19 publications

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“…Because non-tradable output must be consumed within the region where it is produced, non-tradable prices move together with prices of locallyproduced tradable goods. Therefore, the magnitude of the trade-induced regional shock depends only on how the local tradable sector is aected (see Kovak, 2013, for further discussion and details). 7 3 Data…”

Section: Trade-induced Local Economic Shocksmentioning

confidence: 99%

Economic Shocks and Crime: Evidence from the Brazilian Trade Liberalization

Dix-Carneiro¹,

Soares²,

Ulyssea³

2017

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This paper studies the effect of changes in economic conditions on crime. We exploit the 1990s trade liberalization in Brazil as a natural experiment generating exogenous shocks to local economies. We document that regions exposed to larger tariff reductions experienced a temporary increase in crime following liberalization. Next, we investigate through what channels the tradeinduced economic shocks may have affected crime. We show that the shocks had significant effects on potential determinants of crime, such as labor market conditions, public goods provision, and income inequality. We propose a novel framework exploiting the distinct dynamic responses of these variables to obtain bounds on the effect of labor market conditions on crime. Our results indicate that this channel accounts for 75 to 93 percent of the effect of the trade-induced shocks on crime. JEL Classification Codes: J6, K42, F16 AbstractThis paper studies the eect of changes in economic conditions on crime. We exploit the 1990s trade liberalization in Brazil as a natural experiment generating exogenous shocks to local economies. We document that regions exposed to larger tari reductions experienced a temporary increase in crime following liberalization. Next, we investigate through what channels the trade-induced economic shocks may have aected crime. We show that the shocks had signicant eects on potential determinants of crime, such as labor market conditions, public goods provision, and income inequality. We propose a novel framework exploiting the distinct dynamic responses of these variables to obtain bounds on the eect of labor market conditions on crime. Our results indicate that this channel accounts for 75 to 93 percent of the eect of the trade-induced shocks on crime.JEL Classication: J6, K42, F16

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Section: Trade-induced Local Economic Shocksmentioning

confidence: 99%

Economic Shocks and Crime: Evidence from the Brazilian Trade Liberalization

Dix-Carneiro¹,

Soares²,

Ulyssea³

2017

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“…Several other papers investigate the effect of trade on workers in Brazil (e.g. Gonzaga et al 2006, Menezes-Filho and Muendler 2011, Helpman et al 2012, Kovak 2013, with particular attention given to Brazil's early 1990s trade liberalization. Most research on trade and labour markets, including much of the literature on Brazil, is limited to studying workers in formal employment.…”

Section: Introductionmentioning

confidence: 99%

Winners and losers from a commodities-for-manufactures trade boom

Costa¹,

Garred

Pessoa

2016

Journal of International Economics

132

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A recent boom in commodities-for-manufactures trade between China and other developing countries has led to much concern about the losers from rising import competition in manufacturing, but little attention on the winners from growing Chinese demand for commodities. Using census data for Brazil, we find that local labour markets more affected by Chinese import competition experienced slower growth in manufacturing wages and in-migration rates between 2000 and 2010, and greater rises in local wage inequality. However, in locations benefiting from rising Chinese demand, we observe higher wage growth, lower takeup of cash transfers and positive effects on job quality.

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“…Tariff data comes from (29), that detail yearly changes in nominal tariffs to main groups of activity using averages weighted by value added of each industry. The variable I use to represent the local economy shock was proposed by (16) and has been used in the literature to study the impact of Brazilian trade liberalization 5 .…”

Section: Regional Tariff Changementioning

confidence: 99%

“…The regional tariff change does not include data on the non-tradable sector because its prices move together with traded prices, as shown by (16). This measure captures the heterogeneity in the trade shock, taking into account the importance of each industry to regional production (see I study the effects of trade on employment, wage inequality, distribution of employment across activity sectors by gender and schooling and marital decisions.…”

Section: Regional Tariff Changementioning

confidence: 99%

“…More specifically, it is related to papers that explore the empirical approach proposed by (11), that uses the concept of local labor markets to analyze regional effects of a trade shock (see, for instance, (12,13,14,15)). In particular, I use "regional tariff change", a measure of trade-induced shock to local labor markets formalized by (16) in the context of Brazilian trade liberalization. This measure was already used by many other studies that analyze the consequences of the Brazilian trade liberalization on skill premium, wages, earnings, employment, mobility, informality, racial wage gap and crime (see (17,1,18,2)).…”

Section: Introductionmentioning

confidence: 99%

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Labor Market Conditions and Gender Inequality: Evidence From the Brazilian Trade Liberalization

SOUZA¹

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Regional Effects of Trade Reform: What is the Correct Measure of Liberalization?

Cited by 403 publications

References 19 publications

Economic Shocks and Crime: Evidence from the Brazilian Trade Liberalization

Economic Shocks and Crime: Evidence from the Brazilian Trade Liberalization

Winners and losers from a commodities-for-manufactures trade boom

Labor Market Conditions and Gender Inequality: Evidence From the Brazilian Trade Liberalization

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