NAFTA and the Wages of Married Women

59 Pages Posted: 20 Mar 2018

See all articles by Shushanik Hakobyan

Shushanik Hakobyan

International Monetary Fund (IMF)

John McLaren

University of Virginia; NBER

Date Written: March 2018

Abstract

Using US Census data for 1990-2000, we estimate effects of NAFTA on US wages, focusing on differences by gender. We find that NAFTA tariff reductions are associated with substantially reduced wage growth for married blue-collar women, much larger than the effect for other demographic groups. We investigate several possible explanations for this finding. It is not explained by differential sensitivity of female-dominated occupations to trade shocks, or by household bargaining that makes married women workers less able to change their industry of employment than other workers. We find some support for an explanation based on an equilibrium theory of selective non-participation in the labor market, whereby some of the higher-wage married women workers in their industry drop out of the labor market in response to their industry's loss of tariff. However, this does not fully explain the findings so we are left with a puzzle.

Suggested Citation

Hakobyan, Shushanik and McLaren, John, NAFTA and the Wages of Married Women (March 2018). NBER Working Paper No. w24424. Available at SSRN: https://ssrn.com/abstract=3143349

Shushanik Hakobyan (Contact Author)

International Monetary Fund (IMF) ( email )

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John McLaren

University of Virginia ( email )

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