Association for Public Policy Analysis & Management

Countries around the world continue to open their borders to international trade, creating both winners and losers in the process. In this paper, I analyze the impact of a trade shock on gender-specific local labor market outcomes in Brazil. Using an instrumental variable approach and administrative panel data for the formal labor market in Brazil, I estimate the effect of both increased imports from China and increased exports to China on male and female labor market outcomes in Brazil. Preliminary results show that increased trade with China is associated with improvements in women's relative employment position in both the traded sector and the non-traded sector. Increased trade with China also increases female wage growth in both sectors; however, this does not translate to any improvements in the average female to male wage ratio. Breaking the analysis down by skill indicates that trade with China benefits both low-skilled and high-skilled female workers in Brazil. Policy discussions about the effects of international trade often focus on mitigating the negative effects from increased imports. However, this paper highlights the importance for researchers and policymakers to consider the effects of both increased imports and exports when creating policies concerning the impact of increased international trade on labor market outcomes.