Relocation of Formal Industrial Employment in Brazil in the 90's

This paper investigates the pattern of geographic distribution of industrial employment in Brazil, based on evidences from six industrial sectors. The de-concentration pattern observed in the period 1974/88 was re-enforced during the 90's, driven by the institutional change in 1989/90 (trade liberalization and 1988 Constitution). The analysis separates the 90's into two different intervals: a) 1990/93, characterized by defensive strategies, such as cost cuts; and b) 1994/98, with new investments, such as plant relocation. The analysis shows that the employment in labor intensive sectors migrated to low wage areas, whereas natural resource intensive sectors relocated in regions where the relevant natural resource was more available. On the other hand, the employment in capital intensive sectors relocated in areas nearby Sao Paulo, such as Paraná and Minas Gerais, which provide infrastructure and logistic advantages, industrial density and qualified labor. In addition, there are evidences of the importance of regional policies, conducted by state governments. Finally, there was also a relocation of industrial employment inside Sao Paulo State, which indicates that state policies were not necessary conditions for employment relocation