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Gender wage discrimination and trade openness. Prejudiced employers in an open industry

Sarra Ben Yahmed

No 17-047, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: I introduce taste-based discrimination in a trade model with imperfect competition and provide an explanation for the heterogeneous effects of international trade on the gender wage gap within sectors. Firms operate in an oligopoly where prejudiced employers can use their rents to pay men a premium in line with Becker's theory. On one hand, import competition reduces local rents and with them the average gender wage gap in sectors that were sheltered from competition prior to trade liberalization. On the other hand, easier access to foreign markets can increase domestic firms' profits and enable discriminatory firms to maintain wage gaps. Evidence from the Uruguayan trade liberalisation supports the empirical relevance of the taste-based discrimination mechanism at the sectoral level.

Keywords: gender wage gap; employer taste-based discrimination; international trade; imperfect competition (search for similar items in EconPapers)
JEL-codes: F16 J31 J7 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-gen, nep-int and nep-lma
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:17047

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