Trade liberalization and gender gaps in local labor market outcomes: Dimensions of adjustment in the United States

Abstract

We provide empirical results that trade liberalization with China reduced gender gaps in local U.S. labor markets. In MSAs with higher exposure to trade liberalization, the simple wage gender gap decreased, while the residual wage gap increased, indicating important selection effects in labor force participation decisions. The reduction in the gender labor force participation gap was driven by higher entry of women, in particular more educated women, and exit of the less educated men. This results in intrahousehold adjustments in work dynamics, with women entering the labor force to offset the lost income of male partners who left the labor force. We show that trade liberalization increased female workers’ unemployment rate and reliance on part-time jobs.