Different Partners, Different Patterns: Trade and Labour Market Dynamics in Brazil's Post-Liberalisation Period

This paper seeks to evaluate to what extent the greater external exposure of the Brazilian economy in the past decade has contributed to the evolution of employment in the country. This investigation has been undertaken in two ways. First, the total employment variation was decomposed in order to identify the contribution of the final demand components – exports in particular – to this evolution. The decomposition was carried out using the Input-Output Matrix (IOM) methodology and, due to the availability of the estimated IOMs for Brazil, the exercise focused on the period 2000-07. Then, based on the labour content of trade, we estimated the volume of direct employment associated with exports, according to the skill level of workers and to the geographical composition of Brazilian exports, focusing in particular on the years 2002 and 2008. The paper finds that Brazilian exports expanded vigorously in the 2000s and contributed positively to employment generation, though this contribution was relatively small. Largely as a consequence of technological change and shifts in the composition of trade, the jobs created by exports only amounted to about 15% of those created by domestic demand and the export-related jobs were predominantly low skilled jobs.