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Journal of Economic Integration 19(2), June 2004; 353-373 Foreign Trade and the Gender Earnings Differential in Urban Mexico Gautam Hazarika and Rafael Otero University of Texas at Brownsville Abstract This paper examines the effect of foreign trade induced product market competition, upon workplace gender discrimination in urban Mexico as measured by the gender earnings differential. More than 3 decades ago, Becker (1957) argued that labor market discrimination was economically inefficient in that discriminating firms must forego a quantity of profit. Thus, firms with more market power, i.e., firms facing less competition, may be likelier to discriminate. It therefore follows that competition in product markets may reduce discrimination in labor markets. The spread of foreign trade has traditionally been a major factor in increased product market competition. Hence, Becker's thesis suggests foreign trade will reduce employment discrimination. This paper finds evidence of a negative relation between foreign trade linked competition in product markets and workplace gender discrimination in data from the Mexican National Urban Employment Survey (Encuesta National de Empleo Urbano). • JEL Classifications: F160, J160, J700 • Key words: Gender discrimination, Trade liberalization, Mexico I. Introduction While it is agreed there have been notable gains from international trade in recent years, there is lingering concern that trade liberalization, proceeding ever more rapidly under the auspices of the World Trade Organization, has not *Corresponding address: Gautan Hazarika, Department of Business Administration, The University of Texas at Brownsville, 80 Fort Brown, Brownsville, TX 78520, USA Tel: (956)-544-8953 Fax: (956)-544-8736 E-mail: ghazarika@utb.edu, Rafel Otero Tel: (956)-983-7304, Fax: (956)-544-8736, E-mail: rotero@utb.edu ©2004-Center for International Economics, Sejong Institution, All Rights Reserved. This contant donn from 120 112 205 109 ·2020.06-09-29 TTC Journal of Economic Integration 19(2), June 2004; 353-373 Foreign Trade and the Gender Earnings Differential in Urban Mexico Gautam Hazarika and Rafael Otero University of Texas at Brownsville Abstract This paper examines the effect of foreign trade induced product market competition, upon workplace gender discrimination in urban Mexico as measured by the gender earnings differential. More than 3 decades ago, Becker (1957) argued that labor market discrimination was economically inefficient in that discriminating firms must forego a quantity of profit. Thus, firms with more market power, i.e., firms facing less competition, may be likelier to discriminate. It therefore follows that competition in product markets may reduce discrimination in labor markets. The spread of foreign trade has traditionally been a major factor in increased product market competition. Hence, Becker's thesis suggests foreign trade will reduce employment discrimination. This paper finds evidence of a negative relation between foreign trade linked competition in product markets and workplace gender discrimination in data from the Mexican National Urban Employment Survey (Encuesta National de Empleo Urbano). • JEL Classifications: F160, J160, J700 • Key words: Gender discrimination, Trade liberalization, Mexico I. Introduction While it is agreed there have been notable gains from international trade in recent years, there is lingering concern that trade liberalization, proceeding ever more rapidly under the auspices of the World Trade Organization, has not *Corresponding address: Gautan Hazarika, Department of Business Administration, The University of Texas at Brownsville, 80 Fort Brown, Brownsville, TX 78520, USA Tel: (956)-544-8953 Fax: (956)-544-8736 E-mail: ghazarika@utb.edu, Rafel Otero Tel: (956)-983-7304, Fax: (956)-544-8736, E-mail: rotero@utb.edu ©2004-Center for International Economics, Sejong Institution, All Rights Reserved. This contant donn from 120 112 205 109 ·2020.06-09-29 TTC

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