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Men, Women, and Machines: How Trade Impacts Gender Inequality

  • Chinhui Juhn


    (University of Houston)

  • Gergely Ujhelyi


    (University of Houston)

  • Carolina Villegas-Sanchez


    (ESADE Universitat Ramon Llul)

This paper studies the effect of trade liberalization on an under-explored aspect of wage inequality - gender inequality. We consider a model where firms differ in their productivity and workers are differentiated by skill as well as gender. A reduction in tariffs induces more productive firms to modernize their technology and enter the export market. New technologies involve computerized production processes and lower the need for physically demanding skills. As a result, the relative wage and employment of women improves in blue-collar tasks, but not in white-collar tasks. We test our model using a panel of establishment level data from Mexico exploiting tariff reductions associated with the North American Free Trade Agreement (NAFTA). Consistent with our theory we find that tariff reductions caused new firms to enter the export market, update their technology and replace male blue-collar workers with female blue-collar workers.

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Paper provided by Department of Economics, University of Houston in its series Working Papers with number 201303234.

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Date of creation: 22 Jan 2013
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Handle: RePEc:hou:wpaper:201303234
Contact details of provider: Postal: Houston TX 77023
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