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Gender Wage Gaps across Skills and Trade Openness

Author

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  • Sarra Ben Yahmed

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract
Several empirical studies have shown that the effect of openness on the gender wage gap depends on the skill requirement of the workplace. This paper offers a theoretical explanation to understand that finding. We integrate a statistical discrimination framework with the labour assignment approach to give general conditions under which the matching between firms and workers gives rise to a wider gender wage gap at the upper tail of the distribution, in accordance with empirical evidence. We further look at the effect of trade openness on the gender wage gap along the entire distribution. Workers' characteristics vary in two dimensions, skills and job commitment. The inability to observe individual's job commitment induces employers to base partly their decision on group average. Following the literature on labour and international trade, we assume that skills act as complements to technological upgrading. Exporting firms are more skill-intensive and pay higher wages ; assuming further that worker's job commitment is a complement to technological upgrading, we find that a reduction in trade costs increases wage inequality within-groups and has non-monotonic effects on between-group inequality. Trade openness reduces the gender wage gap among unskilled workers but increases the gender wage gap among high-skill workers.

Suggested Citation

  • Sarra Ben Yahmed, 2012. "Gender Wage Gaps across Skills and Trade Openness," Working Papers halshs-00793559, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00793559
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00793559
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    References listed on IDEAS

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    Cited by:

    1. Nicola Gagliardi & Benoît Mahy & François Rycx, 2019. "Does firms’ position in global value chains matter for workers’ wages?. An overview with a gender perspective," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(4), pages 55-62.
    2. Nicola Gagliardi & Benoît Mahy & François Rycx, 2021. "Upstreamness, Wages and Gender: Equal Benefits for All?," British Journal of Industrial Relations, London School of Economics, vol. 59(1), pages 52-83, March.
    3. Shruti Sharma, 2018. "Does Plant Size Matter? Differential Effects of Foreign Direct Investment on Wages and Employment in Indian Manufacturing," Asian Development Review, MIT Press, vol. 35(1), pages 52-80, March.
    4. Nicola Gagliardi & Benoît Mahy & François Rycx, 2018. "Upstreamness, social upgrading and gender: Equal benefits for all?," Working Paper Research 359, National Bank of Belgium.
    5. Nikulin, Dagmara & Wolszczak-Derlacz, Joanna, 2022. "GVC involvement and the gender wage gap: Micro-evidence on European countries," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 268-282.
    6. Ishan Ghosh & Mario Larch & Irina Murtazashvili & Yoto V. Yotov, 2022. "Negative Trade Shocks and Gender Inequality: Evidence from the USA," Economica, London School of Economics and Political Science, vol. 89(355), pages 564-591, July.
    7. Yahmed, Sarra Ben, 2017. "Gender wage discrimination and trade openness. Prejudiced employers in an open industry," ZEW Discussion Papers 17-047, ZEW - Leibniz Centre for European Economic Research.

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