Foreign Trade and the Gender Earnings Differential in Urban Mexico

Authors

Gautam Hazarika, The University of Texas Rio Grande ValleyFollow
Rafael Otero, The University of Texas Rio Grande Valley

Document Type

Article

Publication Date

6-2004

Abstract

This paper examines the effect of foreign trade induced product market competition, upon workplace gender discrimination in urban Mexico as measured by the gender earnings differential. More than 3 decades ago, Becker (1957) argued that labor market discrimination was economically inefficient in that discriminating firms must forego a quantity of profit. Thus, firms with more market power, i.e., firms facing less competition, may be likelier to discriminate. It therefore follows that competition in product markets may reduce discrimination in labor markets. The spread of foreign trade has traditionally been a major factor in increased product market competition. Hence, Becker's thesis suggests foreign trade will reduce employment discrimination. This paper finds evidence of a negative relation between foreign trade linked competition in product markets and workplace gender discrimination in data from the Mexican National Urban Employment Survey (Encuesta National de Empleo Urbano).

Comments

Copyright ©2004 The Journal of Economic Integration

Recommended Citation

Hazarika, G. and Otero, R. (2004) ‘Foreign Trade and the Gender Earnings Differential in Urban Mexico’, The Journal of Economic Integration, 19(2), pp. 353–373. https://doi.org/10.11130/jei.2004.19.2.353

Publication Title

The Journal of Economic Integration

DOI

https://doi.org/10.11130/jei.2004.19.2.353