Decomposing the Effect of Trade on the Gender Wage Gap

Abstract

This paper utilizes regional variation in exposure to increased Chinese imports in Brazil to investigate the impact of trade on gender wage inequality. We find that rising imports reduced wages in local Brazilian labor markets, but that this wage reduction was entirely borne by male workers (thus reducing the gender wage gap). Using Oaxaca-Blinder decompositions, we find that this reduction in the wage gap was largely explained by differences in the occupational employment of female and male workers, with trade increasing the female share of workers in higher-paying occupations and increasing the (relative) returns to primarily-female occupations.

Keywords: gender wage gap, international trade

JEL Classification: F16, F66, J23, J31, J71