CHINA SHOCK AND FEMALE LABOR FORCE PARTICIPATION IN BRAZIL
Brazil was a successful case of economic growth based on import substitution. At the end of last century and after a period of growth stagnation, trade liberalization became a policy to help lower inflation by increasing competitiveness. Recently, with the China shock, the country economy has been exposed to greater competition. In a similar period, an increase of 12 percent in the proportion of formalized female workers took place on Brazilian labor market. The effects of China shock in the US labor market have been widely researched, but there are not so many studies of these impacts in the developing world. Since Brazil has been affected by trade with China through two channels – increase in exports and imports – there may have been some compensatory effects in Brazil that lead to different results from those observed in developed countries. This paper explores the variation of China Shock between Brazilian local labor markets (or microregions), to identify whether the expansion of Chinese participation on international trade was able to improve the women's conditions in the Brazilian labor market between 2000 and 2013 – measured by the proportion of women formalized, the wage ratio of female to male workers – being the first study to assess how the two channels of China shock affected the outcomes of formal Brazilian women, with data from the Brazilian labor market (Rais and Census) and information on trade flows between Brazil and China (BACI database).