Cross-Industry Interlinkages in Employment Growth: Evidence from Brazil

Using industry- and establishment-level data from Brazil and employment data by sector and economic area from the United States, we estimate the extent to which rm- and industry-level employment and entry decisions respond to changes in the employment decisions of geographically and economically proximate rms, comparing Brazil’s experience to a developed country benchmark. We instrument for employment changes by following Bartik (1991) and Blanchard and Katz (1992), combining national-level changes in employment by industry with municipalitylevel variation in the initial distribution of rms to predict such changes between 1995 and