Chinese imports’ impacts on Brazil’s inter-industry wage premium

Abstract

Purpose The purpose of this paper is to investigate the effects of Chinese and non-Chinese import penetration on the inter-industry wage premium, and how such effects vary according to the unskilled-labor intensity of the industry and to the implementation of the Nova Matriz Economica policy in 2008. Design/methodology/approach The paper empirically examines the effects of the Chinese and non-Chinese import penetration on the wage premium using a linear instrumental variables model and data from Brazilian household surveys and censuses. Findings The estimates show the Chinese import penetration positively affecting the wage premium in unskilled-labor intensive. And the implementation of the new macroeconomic policy strengthened this effect. Originality/value To the best of the author’s knowledge, this is the first paper to study the effects of Chinese and non-Chinese import penetration on the inter-industry wage premium.