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Gender, informal employment and trade liberalization in Mexico

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  • Ben Yahmed, Sarra
  • Bombarda, Pamela

Abstract

We study how trade liberalization affects formal employment across gender. We propose a theoretical mechanism to explain how male and female formal employment shares can respond differently to trade liberalization through labor reallocation across tradable and non-tradable sectors. Using Mexican data over the period 1993-2001, we find that tariff cuts increase the probability of working formally for both men and women within 4-digit manufacturing industries. The formalization of jobs within tradable sectors is driven by large firms. Constructing a regional tariff measure, we find that regional exposure to trade liberalization increases the probability of working formally in the manufacturing sector for both men and women, and especially for men. However in the service sectors, the probability of working formally decreases for low-skilled women.

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  • Ben Yahmed, Sarra & Bombarda, Pamela, 2018. "Gender, informal employment and trade liberalization in Mexico," ZEW Discussion Papers 18-028, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:18028
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    Cited by:

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    3. Wang, Feicheng & Liang, Zhe & Lehmann, Hartmut, 2021. "Import competition and informal employment: Empirical evidence from China," University of Göttingen Working Papers in Economics 426, University of Goettingen, Department of Economics.
    4. Mansour Hani & Medina Pamela & Velásquez Andrea, 2023. "When Women’s Work Disappears: Marriage and Fertility Decisions in Peru," Journal of Globalization and Development, De Gruyter, vol. 14(2), pages 385-412, December.
    5. Maria Bas & Pamela Bombarda, 2023. "Input-Trade Liberalization and Formal Employment: Evidence from Mexico," Documents de travail du Centre d'Economie de la Sorbonne 23007, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    6. Tanaka, Kiyoyasu & Greaney, Theresa M., 2024. "Trade and employment in the formal and informal sectors: A natural experiment from Cambodia," Journal of Asian Economics, Elsevier, vol. 90(C).
    7. Gyasi, Genevieve, 2020. "The Impact of Trade Agreement Policy on Employment," MPRA Paper 101307, University Library of Munich, Germany.
    8. Ronald B. Davies & Arman Mazhikeyev, 2021. "The glass border: Gender and exporting in developing countries," The World Economy, Wiley Blackwell, vol. 44(4), pages 879-903, April.
    9. Vandenberg, Paul, 2017. "Can Trade Help Achieve the Employment Targets of the Sustainable Development Goals?," ADBI Working Papers 650, Asian Development Bank Institute.
    10. Krisztina Kis-Katos & Janneke Pieters & Robert Sparrow, 2018. "Globalization and Social Change: Gender-Specific Effects of Trade Liberalization in Indonesia," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(4), pages 763-793, December.
    11. Mina Baliamoune, 2021. "Trade, Infrastructure, and Female Participation in Labor Markets," Research papers & Policy papers on Economic Trends and Policies 2145, Policy Center for the New South.
    12. Dix-Carneiro, Rafael & Kovak, Brian K., 2023. "Globalization and Inequality in Latin America," IZA Discussion Papers 16363, Institute of Labor Economics (IZA).
    13. Mina Baliamoune, 2021. "Trade and Labor Market Outcomes: Does Export Sophistication Affect Women’s Wage Employment?," Research papers & Policy papers on Economic Trends and Policies 2138, Policy Center for the New South.
    14. Heckl, Pia, 2024. "Import Shocks and Gendered Labor Market Responses: Evidence from Mexico," Labour Economics, Elsevier, vol. 88(C).
    15. Pamela Bombarda & Maria Bas, 2023. "Foreign Technology and Informal Employment: Evidence from Mexico," THEMA Working Papers 2023-02, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    16. repec:ags:aaea22:335460 is not listed on IDEAS
    17. Felipe Benguria & Josh Ederington, 2023. "Decomposing the effect of trade on the gender wage gap," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(3), pages 1082-1120, August.
    18. HAYAKAWA,Kazunobu & KEOLA, Souknilanh & SUDSAWASD, Sasatra & YAMANOUCHI, Kenta, 2024. "International Bridges and Informality," IDE Discussion Papers 914, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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    More about this item

    Keywords

    formal and informal labor; gender; trade liberalization; Mexico;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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