Poverty and Inequality Dynamics in Manaus: Legacy of a Free Trade Zone?

Produced by: 
Paris School of Economics
Available from: 
December 2015
Paper author(s): 
Marta Castilho
Marta Menendez
Aude Sztulman
Topic: 
Globalization - Trade
Poverty - Inequality - Aid Effectiveness
Year: 
2016

This study contributes to the literature on the social impacts of Special Economic Zones by analyzing the dynamics of poverty and inequality in the Brazilian state of Amazonas, where the Free Trade Zone of Manaus (FTZM) is located. Using census data, micro-decompositions and counterfactual simulations, we show that if labor income was a major driver of poverty and inequality declines for the municipality of Manaus in the 2000-2010 decade, non-labor income was far more important in the rest of the state of Amazonas. Our contrasting results illustrate both the benefits and limitations of the influence of the FTZM. A better targeting of both social policies and training programs could improve distributional outcomes in the whole area.

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Research section: 
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