The goal of this article is to study job and worker flows in manufacturing and the effect of trade liberalization, looking at the case of Rio Grande do Sul State in the 1990’s. Job flows suggest significant heterogeneity and that within each sector there is simultaneous job creation and destruction. Regarding the effect of the exchange rate and trade liberalization, depreciation reduces job destruction and increase job creation symmetrically, leading to net job growth. Yet, there is no effect on job reallocation. Greater openness expands manufacturing by reducing job destruction. The effect of the exchange rate and demand shocks are larger than the effect of trade openness, suggesting that trade liberalization was not the main reason for manufacturing employment contraction over the period.
manufacturing employment; job creation and destruction; trade liberalization; exchange rate
