Trade Liberalization and Gender Wage Inequality in Mexico

Abstract

After twenty years of trade liberalization in Mexico, the relationship between gender wage inequality and trade remains insufficiently studied, in spite of evidence of increasing numbers of women in industrial employment. This study aims to analyze the effects of export orientation and other characteristics that represent the industrial underpinnings of restructuring on gender wage inequality for 2001–5. There is consistent evidence of the negative impact of export orientation on men's and women's wages and the gender wage ratio, signifying that women lose in both absolute and relative terms. This result holds after controlling for women's share of employment and the skills of both genders, contrary to the expected effect from trade on equality. There is also a negative relation between a rise in the proportion of unskilled workers and the gender wage ratio, which suggests that the trade-induced skill hypothesis cannot be considered an adequate explanation for gender inequality.