The Social Impacts of Trade Liberalization in Brazil: An Analysis of the Manaus Free Trade Zone and the Macroeconomic Reforms in the 1990s

This dissertation explores empirically the social impacts of the trade liberalization in Brazil. The investigation is illustrated in two types of cases: Firstly, we consider the liberalization policies experienced in the 1990s. We seek to determine the impact of these reforms on income and on the multidimensional deprivation, enlarging the study to gender issues. Using the difference in differences method and a panel from 1987-1997, the obtained empirical evidence suggests that trade liberalization has reduced the formal market’s average income, notably in male-intensive sectors, and contributed to the labor informalization process already under way, favoring female labor’s expansion. We could also perceive a deterioration in the household’s non-monetary conditions within male-intensive formal sectors, while female-headed households benefited from multidimensional conditions improvement justified by the expansion of female-intensive informal activities. Subsequently, we treat the impacts of trade opening from the point of view of free trade zones, bringing the Manaus Free Trade Zone’s labor and social outcomes. Using the residuals and the stochastic frontier techniques to estimate the labor and social performances of the Manaus Free Trade Zone, the analysis confirms that the implementation of the special economic zone collaborated to labor and social efficiency in the area due to the rigid checks conducted by SUFRAMA and the strict respect of labor standards applied in the MFTZ. Nevertheless, economic linkages in the region are still weak and positive spillovers from Manaus to its surroundings were probably inexistent.

Keywords: Trade Liberalization, Free Trade Zones, Labor Standards, Social Progress, Multidimensional Poverty, Gender Inequalities.
JEL classification: F13; F14; F16.