Gender-Segmented Labor Markets and Trade Shocks

Gender segmentation in labor markets shapes the local effects of international trade. This paperdevelops a theory that embeds trade in gender-segmented labor markets and shows that in this framework, foreigndemand shocks may increase or decrease the female-to-male employment ratio. If a foreign demand shock from a relevantmarket happens in a female-intensive (male-intensive) sector, the model predicts that the female-to-maleemployment ratio should increase (decrease). The paper then uses plausibly exogenous variation in the exposure ofTunisian local labor markets to foreign demand shocks and shows that the empirical results are consistent with thetheoretical prediction. In Tunisia, a country with a high degree of gender segmentation in the labor markets, foreigndemand shocks have been relatively larger in male-intensive sectors. This induced a decrease in the female-to-maleemployment ratio, with households likely substituting female for male labor supply.