Effects of trade liberalization on the gender wage gap in Mexico

Abstract

This paper examines the change in the gender wage gap in the manufacturing sector in urban Mexico over the trade liberalization period (1987-1993). Mexico rapidly opened its markets to international trade in the mid-1980s in an effort to align its trade policy with GATT guidelines. The sudden exposure of protected Mexican firms to international competition lead to cost saving adjustments in the composition of the labor force and remuneration. This paper focuses on the gender aspects of the latter question, namely whether or not the gender wage gap in the manufacturing sector did change due to trade liberalization, and whether or not this can be attributed to a decrease in discrimination due to the increased competition that was generated by international competition.