Trade openness, human capital and economic growth in Brazil

Abstract

This paper aims to analyze the relationship among human capital of employed labor force, trade openness and economic growth of the Brazilian states. Using a dynamic panel procedure, two theoretical models were estimated: one is the extended Solow model and the other model has endogenous technological progress. The results indicate that 1% – increased level of trade openness increases, on average, the GDP – per capita growth rate between 0.09 to 0.13 percentage points. Already an increase of 1 year in the average level of workers’ schooling leads to an increase of 0.06 pp thru 0.07 pp in this GDP per capita growth rate.