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Effects of Trade on Female Labor Force Participation

Philip Sauré () and Hosny Zoabi ()

No 275733, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: This paper uncovers a counter-intuitive effect of international trade on female labor shares: whenever trade expands, sectors intensive in female labor, female labor shares drop and vice versa. According to our key assumption a rising capital labor ratio closes the gender wage gap. The paper’s mechanism operates as follows. Expansions of sectors intensive in female labor come along with contractions of sectors intensive in male labor. These contractions imply that male labor reallocates to sectors intensive in female labor. The capital labor ratio in the latter sectors drops, which widens the gender wage gap and causes a decrease in aggregate female labor shares. Based on instrumented U.S.-Mexican trade flows, we provide empirical evidence in support of our theory.

Keywords: Financial Economics; Labor and Human Capital (search for similar items in EconPapers)
Date: 2010
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Working Paper: Effects of Trade on Female Labor Force Participation (2010) Downloads
Working Paper: Effects of Trade on Female Labor Force Participation (2009) Downloads
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