IDEAS home Printed from https://ideas.repec.org/a/wly/canjec/v56y2023i3p1082-1120.html
   My bibliography  Save this article

Decomposing the effect of trade on the gender wage gap

Author

Listed:
  • Felipe Benguria
  • Josh Ederington

Abstract

This paper uses variation in exposure to increased Chinese imports in Brazil to investigate the impact of trade on gender wage inequality. First, using Brazilian census data, we find that rising imports reduced the gender wage gap in Brazilian local labour markets. Next, using Oaxaca–Blinder decompositions, we show that this reduction in the wage gap was largely explained by trade increasing the share of female workers in higher‐paying occupations. Finally, we use a matched employer–employee data set to investigate how individual workers adjust to the trade shock. Similar to the local labour market analysis, we find that male workers exposed to increased import competition saw a larger decline in both wages and cumulative earnings relative to female workers. In addition, we uncover an interesting asymmetry in that, while male workers exhibited much higher degrees of industry mobility in response to the trade shock, female workers exhibited an equal if not higher degree of occupational mobility. Décomposer l'effet du commerce sur l'écart de rémunération entre les genres. Cet article utilise la variation de l'exposition aux importations chinoises accrues au Brésil pour étudier la répercussion du commerce sur la disparité de salaire entre les genres. Tout d'abord, à l'aide des données du recensement du Brésil, nous constatons que les importations croissantes ont réduit l'écart de rémunération entre les genres dans les marchés du travail locaux brésiliens. Ensuite, à l'aide des décompositions de Oaxaca‐Blinder, nous démontrons que cette réduction de l'écart salarial était expliquée en grande partie par le fait que le commerce augmentait la proportion des travailleuses dans les postes mieux rémunérés. Enfin, nous utilisons un ensemble de données qui associe les employeurs et les employés pour étudier la façon dont les travailleurs s'ajustent individuellement au choc commercial. Comme pour l'analyse du marché du travail local, nous constatons que les travailleurs exposés à une concurrence accrue des importations ont subi un déclin plus important de leurs salaires et de leurs revenus cumulatifs par rapport aux travailleuses. De plus, nous révélons une asymétrie intéressante, car les travailleurs blancs ont démontré un degré de flexibilité de la main‐d'œuvre bien supérieur en réponse au choc commercial, alors que les travailleuses ont démontré un degré égal, voire supérieur, de mobilité professionnelle.

Suggested Citation

  • Felipe Benguria & Josh Ederington, 2023. "Decomposing the effect of trade on the gender wage gap," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(3), pages 1082-1120, August.
  • Handle: RePEc:wly:canjec:v:56:y:2023:i:3:p:1082-1120
    DOI: 10.1111/caje.12668
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/caje.12668
    Download Restriction: no

    File URL: https://libkey.io/10.1111/caje.12668?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. David H. Autor & David Dorn & Gordon H. Hanson, 2016. "The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 205-240, October.
    2. Petia Topalova, 2010. "Factor Immobility and Regional Impacts of Trade Liberalization: Evidence on Poverty from India," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 1-41, October.
    3. Costa, Francisco & Garred, Jason & Pessoa, João Paulo, 2016. "Winners and losers from a commodities-for-manufactures trade boom," Journal of International Economics, Elsevier, vol. 102(C), pages 50-69.
    4. Sandra E. Black & Elizabeth Brainerd, 2004. "Importing Equality? The Impact of Globalization on Gender Discrimination," ILR Review, Cornell University, ILR School, vol. 57(4), pages 540-559, July.
    5. Ann Harrison & John McLaren & Margaret McMillan, 2011. "Recent Perspectives on Trade and Inequality," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 261-289, September.
    6. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    7. Elhanan Helpman & Oleg Itskhoki & Marc-Andreas Muendler & Stephen J. Redding, 2017. "Trade and Inequality: From Theory to Estimation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(1), pages 357-405.
    8. David H. Autor & David Dorn & Gordon H. Hanson & Jae Song, 2014. "Trade Adjustment: Worker-Level Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1799-1860.
    9. Francine D. Blau & Lawrence M. Kahn, 2017. "The Gender Wage Gap: Extent, Trends, and Explanations," Journal of Economic Literature, American Economic Association, vol. 55(3), pages 789-865, September.
    10. Wolfgang Keller & Hale Utar, 2022. "Globalization, Gender, and the Family [Trade Shocks and Labor Adjustment: A Structural Empirical Approach]," Review of Economic Studies, Oxford University Press, vol. 89(6), pages 3381-3409.
    11. Raven Molloy & Christopher L. Smith & Abigail Wozniak, 2011. "Internal Migration in the United States," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 173-196, Summer.
    12. Paula Bustos, 2011. "Trade Liberalization, Exports, and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinian Firms," American Economic Review, American Economic Association, vol. 101(1), pages 304-340, February.
    13. Ben Jann, 2008. "The Blinder–Oaxaca decomposition for linear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 453-479, December.
    14. Isis Gaddis & Janneke Pieters, 2017. "The Gendered Labor Market Impacts of Trade Liberalization: Evidence from Brazil," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 457-490.
    15. Rafael Dix-Carneiro & Brian K. Kovak, 2017. "Trade Liberalization and Regional Dynamics," American Economic Review, American Economic Association, vol. 107(10), pages 2908-2946, October.
    16. David Card & Ana Rute Cardoso & Patrick Kline, 2016. "Bargaining, Sorting, and the Gender Wage Gap: Quantifying the Impact of Firms on the Relative Pay of Women," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 633-686.
    17. repec:nbr:nberch:14172 is not listed on IDEAS
    18. Bøler, Esther Ann & Javorcik, Beata & Ulltveit-Moe, Karen Helene, 2018. "Working across time zones: Exporters and the gender wage gap," Journal of International Economics, Elsevier, vol. 111(C), pages 122-133.
    19. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
    20. Jorge Alvarez & Felipe Benguria & Niklas Engbom & Christian Moser, 2018. "Firms and the Decline in Earnings Inequality in Brazil," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(1), pages 149-189, January.
    21. Shushanik Hakobyan & John McLaren, 2017. "NAFTA and the Gender Wage Gap," Upjohn Working Papers 17-270, W.E. Upjohn Institute for Employment Research.
    22. Rafael Dix‐Carneiro, 2014. "Trade Liberalization and Labor Market Dynamics," Econometrica, Econometric Society, vol. 82(3), pages 825-885, May.
    23. Juhn, Chinhui & Ujhelyi, Gergely & Villegas-Sanchez, Carolina, 2014. "Men, women, and machines: How trade impacts gender inequality," Journal of Development Economics, Elsevier, vol. 106(C), pages 179-193.
    24. Brian K. Kovak, 2013. "Regional Effects of Trade Reform: What Is the Correct Measure of Liberalization?," American Economic Review, American Economic Association, vol. 103(5), pages 1960-1976, August.
    25. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    26. Ederington, Josh & Minier, Jenny & Troske, Kenneth, 2009. "Where the Girls Are: Trade and Labor Market Segregation in Colombia," IZA Discussion Papers 4131, Institute of Labor Economics (IZA).
    27. Rafael Dix-Carneiro & Brian K. Kovak, 2015. "Trade Liberalization and the Skill Premium: A Local Labor Markets Approach," American Economic Review, American Economic Association, vol. 105(5), pages 551-557, May.
    28. Sarra Ben Yahmed & Pamela Bombarda, 2020. "Gender, Informal Employment and Trade Liberalization in Mexico," The World Bank Economic Review, World Bank, vol. 34(2), pages 259-283.
    29. Barth, Erling & Dale-Olsen, Harald, 2009. "Monopsonistic discrimination, worker turnover, and the gender wage gap," Labour Economics, Elsevier, vol. 16(5), pages 589-597, October.
    30. Krishna, Pravin & Poole, Jennifer P. & Senses, Mine Zeynep, 2014. "Wage Effects of Trade Reform with Endogenous Worker Mobility," Journal of International Economics, Elsevier, vol. 93(2), pages 239-252.
    31. Brussevich, Masha, 2018. "Does trade liberalization narrow the gender wage gap? The role of sectoral mobility," European Economic Review, Elsevier, vol. 109(C), pages 305-333.
    32. Chinhui Juhn & Gergely Ujhelyi & Carolina Villegas-Sanchez, 2013. "Trade Liberalization and Gender Inequality," American Economic Review, American Economic Association, vol. 103(3), pages 269-273, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Poole Jennifer P. & Volpe Martincus Christian, 2023. "Can Online Platforms Promote Women-Led Exporting Firms?," Journal of Globalization and Development, De Gruyter, vol. 14(2), pages 357-384, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Connolly, Laura, 2022. "The effects of a trade shock on gender-specific labor market outcomes in Brazil," Labour Economics, Elsevier, vol. 74(C).
    2. Dix-Carneiro, Rafael & Kovak, Brian K., 2023. "Globalization and Inequality in Latin America," IZA Discussion Papers 16363, Institute of Labor Economics (IZA).
    3. Rafael Dix-Carneiro & Brian K. Kovak, 2017. "Trade Liberalization and Regional Dynamics," American Economic Review, American Economic Association, vol. 107(10), pages 2908-2946, October.
    4. Sarra Ben Yahmed & Pamela Bombarda, 2020. "Gender, Informal Employment and Trade Liberalization in Mexico," The World Bank Economic Review, World Bank, vol. 34(2), pages 259-283.
    5. Dix-Carneiro, Rafael & Kovak, Brian K., 2019. "Margins of labor market adjustment to trade," Journal of International Economics, Elsevier, vol. 117(C), pages 125-142.
    6. L. Alan Winters & Antonio Martuscelli, 2014. "Trade Liberalization and Poverty: What Have We Learned in a Decade?," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 493-512, October.
    7. Muendler, Marc-Andreas, 2017. "Trade, technology, and prosperity: An account of evidence from a labor-market perspective," WTO Staff Working Papers ERSD-2017-15, World Trade Organization (WTO), Economic Research and Statistics Division.
    8. Mansour, Hani & Medina, Pamela & Velásquez, Andrea, 2022. "Import competition and gender differences in labor reallocation," Labour Economics, Elsevier, vol. 76(C).
    9. Manuel Fernández & Gabriela Serrano, 2022. "New Perspectives on Inequality in Latin America," Documentos CEDE 20295, Universidad de los Andes, Facultad de Economía, CEDE.
    10. Yu, Zhen & Wu, Xiaoling & Li, Meng & Guo, Rufei, 2021. "Import competition and the gender gap in labor force participation: Evidence from China," China Economic Review, Elsevier, vol. 69(C).
    11. Dai, Mi & Huang, Wei & Zhang, Yifan, 2021. "How do households adjust to tariff liberalization? Evidence from China's WTO accession," Journal of Development Economics, Elsevier, vol. 150(C).
    12. Krisztina Kis-Katos & Janneke Pieters & Robert Sparrow, 2018. "Globalization and Social Change: Gender-Specific Effects of Trade Liberalization in Indonesia," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(4), pages 763-793, December.
    13. Felipe Benguria & Felipe Saffie & Sergio Urzúa, 2018. "The Transmission of Commodity Price Super-Cycles," NBER Working Papers 24560, National Bureau of Economic Research, Inc.
    14. Nina Pavcnik, 2017. "The Impact of Trade on Inequality in Developing Countries," NBER Working Papers 23878, National Bureau of Economic Research, Inc.
    15. Erten, Bilge & Leight, Jessica & Tregenna, Fiona, 2019. "Trade liberalization and local labor market adjustment in South Africa," Journal of International Economics, Elsevier, vol. 118(C), pages 448-467.
    16. Stephen J. Redding, 2020. "Trade and Geography," NBER Working Papers 27821, National Bureau of Economic Research, Inc.
    17. Besedeš, Tibor & Lee, Seung Hoon & Yang, Tongyang, 2021. "Trade liberalization and gender gaps in local labor market outcomes: Dimensions of adjustment in the United States," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 574-588.
    18. Hirata, Guilherme & Soares, Rodrigo R., 2016. "Competition and the Racial Wage Gap: Testing Becker's Model of Employer Discrimination," IZA Discussion Papers 9764, Institute of Labor Economics (IZA).
    19. Pavcnik, Nina & Goldberg, Pinelopi, 2016. "The Effects of Trade Policy," CEPR Discussion Papers 11104, C.E.P.R. Discussion Papers.
    20. De Lyon, Josh & Pessoa, Joao Paulo, 2021. "Worker and firm responses to trade shocks: The UK-China case," European Economic Review, Elsevier, vol. 133(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:canjec:v:56:y:2023:i:3:p:1082-1120. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1540-5982 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.