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Gender Wage Gaps across Skills and Trade Openness

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  • Sarra Ben Yahmed

    ()
    (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS.)

Abstract

Several empirical studies have shown that the effect of openness on the gender wage gap depends on the skill requirement of the workplace. This paper offers a theoretical explanation to understand that finding. We integrate a statistical discrimination framework with the labour assignment approach to give general conditions under which the matching between firms and workers gives rise to a wider gender wage gap at the upper tail of the distribution, in accordance with empirical evidence. We further look at the effect of trade openness on the gender wage gap along the entire distribution. Workers’ characteristics vary in two dimensions, skills and job commitment. The inability to observe individual’s job commitment induces employers to base partly their decision on group average. Following the literature on labour and international trade, we assume that skills act as complements to technological upgrading. Exporting firms are more skill-intensive and pay higher wages; assuming further that worker’s job commitment is a complement to technological upgrading, we find that a reduction in trade costs increases wage inequality within-groups and has non-monotonic effects on between-group inequality. Trade openness reduces the gender wage gap among unskilled workers but increases the gender wage gap among high-skill workers.

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Bibliographic Info

Paper provided by Aix-Marseille School of Economics, Marseille, France in its series AMSE Working Papers with number 1232.

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Length: 31 pages
Date of creation: Nov 2012
Date of revision: Nov 2012
Handle: RePEc:aim:wpaimx:1232

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Web page: http://www.amse-aixmarseille.fr/en
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Related research

Keywords: Gender Wape Gap; Statistical Discrimination; Trade Openess; Technology Upgrading.;

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  1. Pendakur, Krishna & Woodcock, Simon D., 2009. "Glass Ceilings or Glass Doors? Wage Disparity Within and Between Firms," IZA Discussion Papers 4626, Institute for the Study of Labor (IZA).
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  12. Bernard, A.B. & Jensen, J.B., 1994. "Exporters, Skill Upgrading, and the Wage Gap," Working papers 94-30, Massachusetts Institute of Technology (MIT), Department of Economics.
  13. Chinhui Juhn & Gergely Ujhelyi & Carolina Villegas-Sanchez, 2012. "Men, Women, and Machines: How Trade Impacts Gender Inequality," NBER Working Papers 18106, National Bureau of Economic Research, Inc.
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