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Did Trade Liberalization Help Women? The Case of Mexico in the 1990s

  • Ernesto Aguayo-Tellez
  • Jim Airola
  • Chinhui Juhn

With the signing of the North American Free Trade Agreement (NAFTA) in 1994, Mexico entered a bilateral free trade agreement which not only lowered its own tariffs on imports but also lowered tariffs on its exports to the U.S. We find that women's relative wage increased, particularly during the period of liberalization. Both between and within-industry shifts also favored female workers. With regards to between-industry shifts, tariff reductions expanded sectors which were initially female intensive. With regards to within-industry shifts, we find a positive association between reductions in export tariffs (U.S. tariffs on Mexican goods) and hiring of women in skilled blue-collar occupations. Finally, we find suggestive evidence that household bargaining power shifted in favor of women. Expenditures shifted from goods associated with male preference, such as men's clothing and tobacco and alcohol, to those associated with female preference such as women's clothing and education.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16195.

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Date of creation: Jul 2010
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Publication status: published as Ernesto Aguayo-Tellez , Jim Airola , Chinhui Juhn , Carolina Villegas-Sanchez (2014), Did Trade Liberalization Help Women? the Case of Mexico in the 1990s, in Solomon W. Polachek , Konstantinos Tatsiramos (ed.) New Analyses of Worker Well-Being (Research in Labor Economics, Volume 38) Emerald Group Publishing Limited, pp.1 - 35
Handle: RePEc:nbr:nberwo:16195
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  1. Chinhui Juhn & Jim Airola, 2005. "Wage Inequality in Post-Reform Mexico," Working Papers 2005-01, Department of Economics, University of Houston.
  2. Cragg, Michael Ian & Epelbaum, Mario, 1996. "Why has wage dispersion grown in Mexico? Is it the incidence of reforms or the growing demand for skills?," Journal of Development Economics, Elsevier, vol. 51(1), pages 99-116, October.
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  9. Gordon H. Hanson & Ann Harrison, 1999. "Trade liberalization and wage inequality in Mexico," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(2), pages 271-288, January.
  10. Ann Harrison, 2007. "Globalization and Poverty," NBER Books, National Bureau of Economic Research, Inc, number harr06-1, October.
  11. Bruce A. Weinberg, 2000. "Computer use and the demand for female workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(2), pages 290-308, January.
  12. Pavcnik, Nina, 2003. "What explains skill upgrading in less developed countries?," Journal of Development Economics, Elsevier, vol. 71(2), pages 311-328, August.
  13. Black, Sandra & Brainerd, Elizabeth, 2002. "Importing Equality? The Impact of Globalization on Gender Discrimination," CEPR Discussion Papers 3532, C.E.P.R. Discussion Papers.
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