Spatial Shocks and Gender Employment Gaps

Labor demand shocks unfold unevenly across space. I show that the resulting spatial mismatch can disproportionately impact women’s employment due to gender-based differences in the propensity to commute. My empirical strategy uses rising Chinese import competition in the early 2000s to generate variation in the spatial distribution of work within commuting zones in India. Rising trade exposure caused firms to expand in the urban core and contract in the rural periphery. In areas where firms reduced hiring, women’s employment was significantly lower than men’s after 10 years. While men started commuting across the rural-urban boundary to take up jobs in expanding sectors, women either switched to locally available agriculture or dropped out of the labor force. In line with women being more reliant on public transport, gender gaps are smaller in commuting zones with better bus connectivity. I find similar negative impacts for women regardless of marital status and education level, suggesting that results are not driven by household-level constraints or increasing demand for skilled labor. My findings are consistent with the presence of gendered commuting frictions stemming from a lack of comfortable and safe commuting options for women in India. In the last part of the paper, I use a spatial general equilibrium model to show that relaxing such frictions would have mitigated the observed decline in female labor force participation in India between 2001 and 2011 by 30%, increasing total output by 0.4%.