Working Paper: NBER ID: w16195
Authors: Ernesto Aguayo-Tellez; Jim Airola; Chinhui Juhn
Abstract: With the signing of the North American Free Trade Agreement (NAFTA) in 1994, Mexico entered a bilateral free trade agreement which not only lowered its own tariffs on imports but also lowered tariffs on its exports to the U.S. We find that women's relative wage increased, particularly during the period of liberalization. Both between and within-industry shifts also favored female workers. With regards to between-industry shifts, tariff reductions expanded sectors which were initially female intensive. With regards to within-industry shifts, we find a positive association between reductions in export tariffs (U.S. tariffs on Mexican goods) and hiring of women in skilled blue-collar occupations. 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.
Keywords: Trade Liberalization; Gender Equality; NAFTA; Labor Market Outcomes
JEL Codes: J16; J21; J31; O19; O24; O54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Trade liberalization (F13) | Increase in women’s relative wages (J39) |
| Trade liberalization (F13) | Increase in employment rates of women (J21) |
| Tariff reductions (F13) | Expansion of female-intensive sectors (J21) |
| Tariff reductions (F13) | Increased hiring of women in skilled blue-collar occupations (J79) |
| Increased earnings for women (J31) | Changes in household bargaining power (D19) |
| Shift in expenditures from male preferences to female preferences (D12) | Changes in household bargaining power (D19) |