Did Trade Liberalization Help Women? The Case of Mexico in the 1990s

Ernesto Aguayo-Tellez, Jim Airola, Chinhui Juhn

NBER Working Paper No. 16195
Issued in July 2010
NBER Program(s):   ITI   LS

Using household and establishment level data which span the 1990s, we examine the impact of trade liberalization policies on women’s labor market outcomes in Mexico. We find that that women’s relative wage remained stable while employment increased, leading to an increase in women’s wage bill share. Between-industry shifts, consistent with trade-based explanations, account for up to 40 percent of the growth in women’s wage bill share between 1990 and 2000. Comparing across industries, we find tariff cuts and exports are positively related to industry growth and women benefited since some of the fastest growing industries were female-intensive industries. We use establishment level data for the manufacturing sector to examine within-industry shifts in women’s wage bill share. Even controlling for detailed industry and maquiladora status, women’s wage bill share is positively related to exports by foreign firms, suggesting that trade liberalization further encouraged outsourcing and assembly-type activity. Finally, we find suggestive evidence that household bargaining power shifted in favor of women. Expenditures shifted from goods associated with male preference, such as men’s clothing and tobacco and alcohol, to those associated with female preference such as women’s clothing and education.

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Acknowledgments

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