Miriam Haruko Murata

This work has a general objective of analyzing the capital-labor relationship of the Brazilian economy for the 1990-2003 period through a panel data approach, evidencing the changes that occurred in the relationship of these inputs due to the economical transformations endured by the economical reforms observed especially during the decade of the 1990s. Thus, through the data of about 40 of the 42 sectors of the Input-Output Matrix supplied for the National Counts and estimated by IBGE, the partial and total elasticities were estimated for 5 panels: the Brazilian Economy, Extractive Industry, Agrobusiness, Transformation Industry and Services, for the total (1990-2003), before the Real-Plan (1990-1994) and after the Real-Plan (1995-2003) periods. First of all, the literary revision of the capital-labor relationship of the Brazilian economy for the delimited period of the study is carried out, where in a similar conclusion can be observed and noted upon by the previous studies of the introduced economic reforms, i.e., the commercial openness, the privatization of state-owned firms, economic deregulation and stabilization reached by the Real Plan process, influenced immensly the recovery of the productivity of both factors, among which labor productivity was shown to have higher growth rates. Subsequently, literary revision of the elasticity of substitution is carried out, remarking a wide variable of factors concerning the empirical tecniques used and adopted functional forms, beyond just the supposition about the technological change observed. Next, the theoretical model applied econometrically by panel data tecniques is developed, adopting a Cobb-Douglas production function. Through the statistics tests the fixed effect model and correction for serial correlation and heterocedasticity was delimited for all panels, except for the Extractive Industry panel, which was specified by the random effects model. The outcomes showed that in all panels and in all analysed periods, the capital-labor elasticity of substitution presented less then one, indicating decreasing returns to scale. Moreover, excepting the Agrobusiness panel for total period, the returns showed by the employ of the capital factor in the final product was in average 12,25 percentual points higher than the labor factor in all panels. However, after breaking the periods of the before and after Real Plan, excepting for the Extractive Industry case (which showed a reversed outcome), one is able to realize that the average of the product elasticity of the capital decreased in all panels for the before to after Real Plan period of about 24 percentual points, while the average of the labor increased of about 5,5 percentual points. Thus, one suggest that in fact, there was a substitutive processs of workers by capital due to the economic reforms introduced more powerfully in the beginning of the decade and the consequent productive modernization process. Nevertheless from the degree of the fall observed by the elasticity of the labor by capital, one is able to understand that possibly this process is showing signals of gradual estabilization in some sectors.