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Effects of Trade on Female Labor Force Participation

  • Hosny Zoabi
  • Philip Saure

This paper uncovers a counter-intuitive effect of international trade on female labor shares: whenever trade expands, sectors intensive in female labor, female labor shares drop and vice versa. According to our key assumption a rising capital labor ratio closes the gender wage gap. The paper’s mechanism operates as follows. Expansions of sectors intensive in female labor come along with contractions of sectors intensive in male labor. These contractions imply that male labor reallocates to sectors intensive in female labor. The capital labor ratio in the latter sectors drops, which widens the gender wage gap and causes a decrease in aggregate female labor shares. Based on instrumented U.S.-Mexican trade flows, we provide empirical evidence in support of our theory.

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Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c015_015.

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Length: 55 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:deg:conpap:c015_015
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