Importing Equality? The Impact of Globalization on Gender Discrimination

An argument dating from Gary Becker's work in 1957, but seldom tested, is that discrimination withers in an increasingly competitive environment because its practice raises production costs. This study finds that employers in concentrated U.S. manufacturing industries - which, compared to competitive industries, are largely insulated from competitive pressures - did reduce discrimination against women partly in response to globalization-related increases in competition in the 1980s. Specifically, between 1976 and 1993, the residual gender wage gap narrowed more rapidly in concentrated industries that experienced a trade shock than in competitive industries that experienced a trade shock. The authors conclude that although trade may increase wage inequality by modestly reducing the relative wages of less-skilled workers, at the same time it appears to benefit women by reducing the ability of firms to discriminate