Gender wage discrimination with employer prejudice and trade openness

Sarra Ben Yahmed

World Development, 2023, vol. 170, issue C

Abstract: This paper studies the effect of trade liberalisation on gender wage inequality. A simple trade model with employer taste-based discrimination and imperfect competition provides an explanation for the heterogeneous effects of international trade on the gender wage gap within sectors. While import competition reduces rents and with them the gender wage gap, the effect of exports depends on the level of concentration of a sector. On the one hand, easier access to foreign markets has a competition effect through the selection of the low-cost firms in non-concentrated sectors. On the other hand, better export opportunities with easier access to foreign markets can increase profits of domestic firms’ in concentrated sectors and thus enable discriminatory firms to maintain wage gaps. Evidence from Uruguay supports the empirical relevance of the taste-based discrimination mechanism at the sector level.

Keywords: Gender wage gap; Employer taste-based discrimination; International trade; Imperfect competition; Oligopoly; Uruguay (search for similar items in EconPapers)
JEL-codes: F16 J31 J7 L13 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:170:y:2023:i:c:s0305750x23001377

DOI: 10.1016/j.worlddev.2023.106319

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