This paper studies the relationship between trade liberalization and informality. It is often claimed that increased foreign competition in developing countries leads to an expansion of the informal sector, defined as the sector that does not comply with labor market legislation. Using data from...

The authors study the impact of the 1988-94 trade liberalization in Brazil on wage distribution. They explore three main channels through which trade liberalization could have affected wage distribution: (1) increasing returns to skilled workers because of Hecksher-Ohlin adjustments to trade...

Recent research has focused on the short- to medium-term implications of trade reforms for the labour market outcomes and poverty in poor economies. This article summarises the evidence on the short-term consequences of the Colombian trade reform initiated in 1985 for industry employment and...