Mind the Gender Wage Gap – the Impact of Trade and Competition on Sectoral Wage Differences


The research was performed under (Polish) National Science Centre’s project: ‘Gender wage discrimination: size, determinants and consequences – an analysis of sectoral wage differences in OECD countries’, No. DEC-2011/01/B/HS4/04809. The paper has benefited from the comments of participants of European Trade Study Group Conference, Copenhagen Business School, September 2011. Finally, the author acknowledges comments and suggestions from two anonymous referees.


This paper examines differences between women’s and men’s wages in 18 selected OECD countries in the period 1970 to 2005. The study is based on 12 manufacturing sector- and skill-specific sets of panel data on the gender wage gap. We apply a system generalised method of moments (GMM) estimator to the extended version of the conditional gender wage gap convergence equation, controlling for sector concentration and industry-specific measures of openness using a difference-in-difference approach: trade-affected concentrated sectors versus trade-affected competitive sectors. The results indicate that: (i) an increase in sector concentration is associated with wage gap growth; (ii) both import and export penetration are associated with a reduction of the high-skill gender wage gap growth in concentrated industries; (iii) there is evidence of a widening impact of trade on the medium and low-skill occupational gender wage gap growth in less competitive industries; (iv) institutional regulations of the labour market have an impact on the development of the gender wage gap: for highly-skilled labour an increase in labour market regulation raises the growth of the gender wage gap, while for medium- and low-skilled workers, it lowers it.