Mind the gaps: Gender complementarities in migration and FDI

Federico Carril-Caccia, Ana Cuadros and Jordi Paniagua (jordi.paniagua@uv.es)
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Ana Cuadros: Universitat Jaume I and Institute of International Economics

No 2402, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: This paper analyzes the effect of increasing the share of female migrants on Foreign Direct Investment (FDI). We develop a model that introduces gendered labor and discrimination into a structural model of FDI. Our estimates reveal that the increasing feminization of the immigrant labor force is positively associated with FDI. Furthermore, the model drives the quantification of the elasticity of substitution (EoS) between male and female labor for 27 OECD countries (1.3 on average) and three job types: managers (3.2), professionals (2.1), and non-qualified workers (6.0). The EoS is lower in countries with small gender gaps (e.g., 0.3 in Sweden) than in countries with large gender gaps (e.g., 6.1 in Mexico). Our analysis offers novel perspectives on the impacts of migration and the potential implications of policies targeted at enhancing female workforce participation.

Keywords: FDI; migration; elasticity of substitution; gender; discrimination (search for similar items in EconPapers)
JEL-codes: F21 F22 F23 (search for similar items in EconPapers)
Date: 2024-01
New Economics Papers: this item is included in nep-gen, nep-int, nep-lab and nep-mig
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