Macroeconomic Effects of Reducing Gender Wage Inequality in an Export‐Oriented, Semi‐Industrialized Economy

Abstract

The paper presents two short‐run, structuralist models of an export‐oriented, two‐sector, semi‐industrialized economy in which women workers are concentrated in export production. The first model analyzes the comparative static effects of an exogenous increase in female wages holding male wages and the exchange rate constant. The second model endogenizes the female–male wage ratio and the real exchange rate, assuming flexible nominal wages and a crawling‐peg exchange rate. Either stable or unstable dynamics are possible. In the stable cases, a depreciation policy can either close or widen the gender wage gap.