Decomposing the Effect of Trade on the Gender Wage Gap
49 Pages Posted: 28 Jan 2017 Last revised: 3 Sep 2021
Date Written: January 27, 2017
This paper utilizes variation in exposure to increased Chinese imports in Brazil to investigate the impact of trade on gender wage inequality. First, using Brazilian census data, we find that rising imports reduced the gender wage gap in Brazilian local labor markets. Next, using Oaxaca-Blinder decompositions, we show that this reduction in the wage gap was largely explained by trade increasing the share of female workers in higher-paying occupations. Finally, we utilize a matched employer-employee dataset to investigate how individual workers adjust to the trade shock. Similar to the local labor market analysis, we find that male workers exposed to increased import competition saw a larger decline in both wages and cumulative earnings relative to female workers. In addition, we uncover an interesting asymmetry in that, while male workers exhibited much higher degrees of industry mobility in response to the trade shock, female workers exhibited a higher degree of occupational mobility.
Keywords: gender wage gap, international trade
JEL Classification: F16, F66, J23, J31, J71
Suggested Citation: Suggested Citation