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Gender Wage Gaps across Skills and Trade Openness

  • Sarra Ben Yahmed

    ()

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

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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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
Contact details of provider: Web page: http://www.amse-aixmarseille.fr/en

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  1. Irene Brambilla & Rafael Dix Carneiro & Daniel Lederman & Guido Porto, 2011. "Skills, Exports, and the Wages of Seven Million Latin American Workers," CEDLAS, Working Papers 0119, CEDLAS, Universidad Nacional de La Plata.
  2. 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.
  3. Paula Bustos, 2005. "The impact of trade liberalization on skill upgrading. Evidence from Argentina," Economics Working Papers 1189, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2011.
  4. Juan Pablo Atal & Hugo R. Ñopo & Natalia Winder, 2009. "New Century, Old Disparities: Gender and Ethnic Wage Gaps in Latin America," IDB Publications (Working Papers) 5398, Inter-American Development Bank.
  5. Sara Rica & Juan Dolado & Vanesa Llorens, 2008. "Ceilings or floors? Gender wage gaps by education in Spain," Journal of Population Economics, Springer, vol. 21(3), pages 777-778, July.
  6. Michael W. Klein & Christoph Moser & Dieter M. Urban, 2010. "The Contribution of Trade to Wage Inequality: The Role of Skill, Gender, and Nationality," NBER Working Papers 15985, National Bureau of Economic Research, Inc.
  7. Jim Albrecht & Aico van Vuuren & Susan Vroman, 2007. "Counterfactual Distributions with Sample Selection Adjustments: Econometric Theory and an Application to the Netherlands," Working Papers gueconwpa~07-07-06, Georgetown University, Department of Economics.
  8. Marcel Fafchamps & Mans Söderbom & Najy Benhassine, 2009. "Wage Gaps and Job Sorting in African Manufacturing," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 18(5), pages 824-868, November.
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  10. Menon, Nidhiya & Rodgers, Yana van der Meulen, 2009. "International Trade and the Gender Wage Gap: New Evidence from India's Manufacturing Sector," World Development, Elsevier, vol. 37(5), pages 965-981, May.
  11. Arnaud Costinot & Jonathan Vogel, 2009. "Matching and Inequality in the World Economy," NBER Working Papers 14672, National Bureau of Economic Research, Inc.
  12. Sandra E. Black & Elizabeth Brainerd, 2004. "Importing equality? The impact of globalization on gender discrimination," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 57(4), pages 540-559, July.
  13. Ozler, Sule, 2000. "Export Orientation and Female Share of Employment: Evidence from Turkey," World Development, Elsevier, vol. 28(7), pages 1239-1248, July.
  14. Tor Jakob Klette & Samuel Kortum, 2002. "Innovating Firms and Aggregate Innovation," NBER Working Papers 8819, National Bureau of Economic Research, Inc.
  15. Amuedo-Dorantes Catalina & De la Rica Sara, 2006. "The Role of Segregation and Pay Structure on the Gender Wage Gap: Evidence from Matched Employer-Employee Data for Spain," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-34, April.
  16. Pendakur, Krishna & Woodcock, Simon, 2010. "Glass Ceilings or Glass Doors? Wage Disparity Within and Between Firms," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(1), pages 181-189.
  17. Sarra Ben Yahmed, 2012. "Gender Wage Discrimination and Trade Openness. Prejudiced employers in an open industry," Working Papers halshs-00793561, HAL.
  18. Franziska Ohnsorge & Daniel Trefler, 2007. "Sorting It Out: International Trade with Heterogeneous Workers," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 868-892, October.
  19. Marcel Fafchamps, 2009. "Human Capital, Exports, and Earnings," Economic Development and Cultural Change, University of Chicago Press, vol. 58(1), pages 111-141, October.
  20. Thomas Sampson, 2012. "Selection into Trade and Wage Inequality," CEP Discussion Papers dp1152, Centre for Economic Performance, LSE.
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