International Trade and Gender Wage Discrimination: Evidence from East Asia

Authors


  • 1 Berik: . Tel: 757-221-2376; Fax: 757-221-1175; E-mail: yvrodg@wm.edu. Zveglich: Asian Development Bank, Sri Lanka Resident Mission, Colombo 3, Sri Lanka. We thank Theodora Galabova, Jim Gander, Andrew Mason, Will Milberg, Susan Razzaz, Sarah Stafford, and seminar participants at the New School University, University of Utah, College of William and Mary, Levy Economics Institute, and World Bank for their suggestions. This work is supported by the World Bank, a William and Mary Faculty Research Assignment, and a University of Utah Faculty Fellow Leave. This paper does not necessarily reflect the views of the Asian Development Bank or World Bank.

Abstract

The paper explores how competition from international trade affects gender wage discrimination in two open economies. According to neoclassical theory, if discrimination is costly, then increased industry competitiveness from international trade lessens the incentive for employers to discriminate against women. This effect should be stronger in concentrated sectors, where employers can use excess profits to cover the costs of discrimination. Alternatively, increased international trade may reduce women's bargaining power to achieve wage gains. Results for Taiwan and Korea indicate that, in contrast to neoclassical theory, competition from foreign trade in concentrated industries is positively associated with wage discrimination against women.

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