Assessment of the distributive impact of national trade reforms in Brazil

• DOI: 10.1007/s10888-011-9213-0
• Publication Date: 2012-01-09T08:25:20Z
• Authors: Fernando Borraz; Daniel Ferrés; Máximo Rossi
• Keywords: 0502 economics and business; 05 social sciences; 8. Economic growth; 1. No poverty

This paper quantifies the distributional and poverty effects of trade liberalization in Brazil using household survey data. We estimate the consumption and labor impact of Mercosur trade reform following the methodology suggested by Porto (J Int Econ 70:140–160, 2006) and Nicita (J Dev Econ 89(1):19–27, 2009). Results show that trade liberalization had a pro-poor effect in Brazil. This result is largely explained by two major observations: the fact that consumption good prices decreased after Brazil entered Mercosur and a close to zero labor income effect. We find that poverty decreased after national trade liberalization (both for women and men). Additionally, we obtained no significant inequality effects after national trade reforms.