NAFTA and the Gender Wage Gap

Authors

Shushanik Hakobyan, Fordham University
John McLaren, University of Virginia

Series

Upjohn Institute working paper ; 17-270

DOI

10.17848/wp17-270

Issue Date

April 2017

Abstract

Using U.S. Census data for 1990–2000, we estimate effects of NAFTA on U.S. wages, focusing on differences by gender. We find that NAFTA tariff reductions are associated with substantially reduced wage growth for married blue-collar women, much larger than the effect for other demographic groups. We investigate several possible explanations for this finding. It is not explained by differential sensitivity of female-dominated occupations to trade shocks, or by household bargaining that makes married female workers less able to change their industry of employment than other workers. We find some support for an explanation based on an equilibrium theory of selective non-participation in the labor market, whereby some of the higher-wage married female workers in their industry drop out of the labor market in response to their industry’s loss of tariff. However, this does not fully explain the findings, so we are left with a puzzle.

Sponsorship

W.E. Upjohn Institute for Employment Research Early Career Research Award 15-150-05 and Bankard Fund for Political Economy

Subject Areas

LABOR MARKET ISSUES; Wages, health insurance and other benefits; Inequality