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Decomposing the effect of trade on the gender wage gap

Author

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  • Felipe Benguria
  • Josh Ederington

Abstract

This paper uses 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 labour 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 use a matched employer–employee data set to investigate how individual workers adjust to the trade shock. Similar to the local labour 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 an equal if not higher degree of occupational mobility. Décomposer l'effet du commerce sur l'écart de rémunération entre les genres. Cet article utilise la variation de l'exposition aux importations chinoises accrues au Brésil pour étudier la répercussion du commerce sur la disparité de salaire entre les genres. Tout d'abord, à l'aide des données du recensement du Brésil, nous constatons que les importations croissantes ont réduit l'écart de rémunération entre les genres dans les marchés du travail locaux brésiliens. Ensuite, à l'aide des décompositions de Oaxaca‐Blinder, nous démontrons que cette réduction de l'écart salarial était expliquée en grande partie par le fait que le commerce augmentait la proportion des travailleuses dans les postes mieux rémunérés. Enfin, nous utilisons un ensemble de données qui associe les employeurs et les employés pour étudier la façon dont les travailleurs s'ajustent individuellement au choc commercial. Comme pour l'analyse du marché du travail local, nous constatons que les travailleurs exposés à une concurrence accrue des importations ont subi un déclin plus important de leurs salaires et de leurs revenus cumulatifs par rapport aux travailleuses. De plus, nous révélons une asymétrie intéressante, car les travailleurs blancs ont démontré un degré de flexibilité de la main‐d'œuvre bien supérieur en réponse au choc commercial, alors que les travailleuses ont démontré un degré égal, voire supérieur, de mobilité professionnelle.

Suggested Citation

  • 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.
  • Handle: RePEc:wly:canjec:v:56:y:2023:i:3:p:1082-1120
    DOI: 10.1111/caje.12668
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    References listed on IDEAS

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    3. Görg, Holger & Jäkel, Ina Charlotte, 2024. "Beyond borders: Do gender norms and institutions affect female businesses?," Kiel Working Papers 2273, Kiel Institute for the World Economy (IfW Kiel).

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