Importing Equality? The Effects of Increased Competition on the Gender Wage Gap

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Importing Equality? The Effects of Increased Competition on the Gender Wage Gap

April 1999 Number 74

JEL classification: J7, J3

Authors: 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 change residual wage gap across industries (as well as cities) over time using CPS data from 1977-1994, and correlation between measure changes import shares. are further broken down by type of market structure an industry, i.e. whether industry is concentrated or competitive. Since face little competitive pressure reduce discrimination, increase competition increased trade should lead a reduction use difference-in-differences approach compare versus unconcentrated sectors, latter control for that unrelated pressures. findings indicate through did contribute narrowing gap, suggesting that, at least sense, may benefit women relative men.

Available only in PDF PDF

34 pages / 274 kb

For a published version of this report, see Sandra E. Black and Elizabeth Brainerd, "Importing Equality? The Impact of Globalization on Gender Discrimination," Industrial and Labor Relations Review 57, no. 4 (July 2004): 540-59.

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