trade good for women, Fed sez

[Wojtek Sokolowski]

At 02:31 PM 4/28/99 -0400, Doug Henwood quoted:
><http://www.ny.frb.org/rmaghome/staff_rp/sr74.html>
>
>Staff Reports
>April 1999
>Number 74
>
>
>Importing Equality? The Effects of Increased Competition on the Gender
Wage Gap
>
>
>Sandra E. Black and Elizabeth Brainerd
>
>It is now well documented that the gender wage gap declined substantially
>in the 1980s, despite rising overall wage inequality.  While Blau and Kahn
>(JoLE 1997) attribute much of this improvement to gains in women's relative
>labor market experience and other observable characteristics, a substantial
>part of the decline in the gender wage gap remains unexplained, and may be
>due to reduced discrimination against women in the labor market.  This
>paper tests the hypothesis (based on Becker 1957) that increased
>globalization in the 1980s forced employers to reduce costly discrimination
>against women and thus accounted for part of the "unexplained" improvement
>in the gender pay gap.
>To test this hypothesis, we calculate the change in the residual gender
>wage gap across industries (as well as cities) over time using CPS data
>from 1977 - 1994, and test the correlation between this measure and changes
>in import shares.  The wage data are further broken down by the type of
>market structure in an industry, i.e. whether the industry is concentrated
>or competitive.  Since concentrated industries face little competitive
>pressure to reduce discrimination, an increase in competition from
>increased trade should lead to a reduction in the residual gender wage
>gap.  We use a difference-in-differences approach to compare the change in
>the residual gender wage gap in concentrated versus unconcentrated sectors,
>using the latter as a control for changes in the gender wage gap that are
>unrelated to competitive pressures.  The findings indicate that increased
>competition through trade did contribute to the narrowing of the gender
>wage gap, suggesting that, at least in this sense, trade may benefit women
>relative to men.
>JEL Classification Codes

Of course, an alternative explantion is that increased competition may hurt
men relative to women.  Gender gap may be narrowed by either increasing the
wages of women or decreasing wages of men, I the authors do not indicate
that they accounted for which of these two led to the reduction of gender gap.

I find it rather hard to belive that international competition created an
upward pressure on female wages - a more believable story is that it
created a downward pressure on wages, which has been implemented through
feminization of workforce (see, for example Reskin and Roos, _Job cues,
gender cues_ who describe the effect of feminization of "traditionally"
male occupations on wages).

But in the topsy-turvy world of economics, hey - everything is a success
story, as long as happens in the US of A and it does not smack of government.