A picture of wage inequality and the allocation of labor through a period of trade liberalization: The case of Brazil

This paper constructs a picture of the labor market impact of trade liberal ization in Brazil. We examine the level and dispersion of wages, the skille d wage premium, and employment composition before and after trade liberaliz ation. After trade reform, there was a rise in the returns to college educa tion which, since the share of college workers also rose, is attributable t o rising demand. This change did not increase overall wage dispersion becau se of the small share of college-educated workers and because of decreasing returns to intermediate levels of education. (C) 2001 Elsevier Science Ltd . All rights reserved.