Does import quality affect Brazilian wages?

Abstract

In this paper, we investigated whether import quality affects wages paid by sectors facing import competition in Brazil from 1997 to 2016. First, we estimated a fixed effects model and, then, an unconditional quantile regression. We found that the quality of imports positively impacts Brazilian wages and that import quality affects wage bands differently in Brazil. In addition, we determined that the quality of imports originated in poorer economies has a slightly greater effect on wages in respect of richer countries. We concluded that, to fight international competition, local firms might improve product quality by hiring skilled workers, who earn more, and that the raise in the wage bill varies depending on the exporter income