Decomposing the Effect of Trade on the Gender Wage Gap

49 Pages Posted: 28 Jan 2017 Last revised: 3 Sep 2021

See all articles by Felipe Benguria

Felipe Benguria

University of Kentucky - Gatton College of Business and Economics

Josh Ederington

University of Kentucky - Department of Economics

Date Written: January 27, 2017

Abstract

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

Benguria, Felipe and Ederington, Josh, Decomposing the Effect of Trade on the Gender Wage Gap (January 27, 2017). Available at SSRN: https://ssrn.com/abstract=2907094 or http://dx.doi.org/10.2139/ssrn.2907094

Felipe Benguria (Contact Author)

University of Kentucky - Gatton College of Business and Economics ( email )

550 South Limestone
Lexington, KY 40506
United States

Josh Ederington

University of Kentucky - Department of Economics ( email )

335 Business and Economics Building
Lexington, KY 40506
United States

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