Trade Liberalization and Gender Wage Gap in Mexico

Abstract

The objective of the paper is to analyze the effect of trade liberalization on the wage gap by gender and its components in Mexico. For this, the behavior of the wage gap is analyzed for different regions of the country, classified according to the degree of exposure to trade liberalization. Using the quantitative methodology of Melly (2005) the breakdown of the salary gap by quantile used the micro data of the National Survey of Occupation and Employment (ENOE) for the years 2005 and 2016. The results reveal the existence of wage gap by gender in the different regions, that its magnitude differs regionally throughout distribution and that the wage gap has declined over time in all regions of Mexico, but the wage disadvantage still persists against women and this is higher in the lower deciles. Most of the differences are not explained by productive characteristics, although the proportion of inequality associated with discrimination factors declined in 2016 in relation to the previous reference year.

A sectoral analysis of Trade openness and Women employment in selected East African Countries

“…It is common for people to act as if they have the cash on hand in order to avoid doing business with specific groups because doing so is psychologically or emotionally taxing. Artecona and Cunningham (2002) hypothesize that trade liberalization will reduce the gender wage gap among Mexican companies since it can abolish the differential pay that they make for men and women with the same skills. Choosing male employees over female employees will increase the cost of doing business since they will receive higher compensation than their marginal productivity.…”

Gender wage discrimination by distribution of income in Mexico, 2005-2020

“…Results also show a non-linear relationship between gender wage differentials and labor income levels that is consistent with the sticky floor hypothesis -which posits that male workers earn higher hourly salaries than female workers at lower income levels-but departs from the idea of a non-linear U-shaped relationship, where greater gender wage differentials are observed at the low and high ends of the labor-income distribution at the same time -which would be in line with both the sticky-floor and the glass-ceiling hypotheses (Arceo-Gomez & Campos-Vazquez, 2014)-, even though other studies have documented this trend for Mexico (Pagan & Ullibarri, 2000;Popli, 2013;Rodríguez-Pérez & Castro-Lugo, 2017). Findings here suggest that women earn higher wages than men per hour at higher levels of income, but men's hourly salaries are up to 15% larger than women's at low-income levels, which implies that women have clear disadvantages when the number of worked hours is taken into account to estimate labor income.…”

The impacts of trade liberalization on the local labor market: Older women are especially vulnerable

“…Despite a growing body of literature on how globalization shapes gender disparities, prior studies offer mixed conclusions across developed and developing countries (Besedeš et al, 2021; Bøler et al, 2018; Brussevich, 2018; Connolly, 2022; Ghosh et al, 2022; Hakobyan & McLaren, 2017; Juhn et al, 2014; Korinek, 2005; Mansour et al, 2022; Oostendorp, 2009; Pieters, 2015). Earlier studies find that rising competition from trade liberalization may increase the hiring of female workers more than male workers by weakening employers' discrimination against women (Artecona & Cunningham, 2002; Black & Brainerd, 2004; Ederington et al, 2009; Oostendorp, 2009). However, more recent studies find that discrimination plays a smaller role in the gender gap (Aguayo‐Tellez et al, 2012; Juhn et al, 2014).…”