Trade Liberalization and the Gender Employment Gap in China

Feicheng Wang,Krisztina Kis-Katos,Minghai Zhou

doi:10.2139/ssrn.3682940

Abstract

This paper investigates the impact of import liberalization induced labor demand shocks on male and female employment in China. Combining data from population and firm census waves over the period of 1990 to 2005, we relate prefecture-level employment by gender to the exposure to tariff reductions on locally imported products. Our empirical results show that increasing import competition has kept more females in the workforce, reducing an otherwise growing gender employment gap. These dynamics were present both in the local economies as a whole and among formal private industrial firms. Examining channels through which tariff reductions differentially affected males and females, we find that trade induced competitive pressures contributed to a general expansion of female intensive industries, shifts in sectoral gender segregation, reductions in gender discrimination in the labor market, technological upgrading through computerization and general income growth.

Highlights

Since the 1990s, China has substantially opened up its goods market to global trade
Column 2 shows that male employment rates did not significantly respond to import tariff reductions, whereas female employment increased more substantially with import trade liberalization
The difference between female and male coefficients in the last column shows the extent to which import tariff reductions contributed to a changing gender employment gap

Summary

Introduction

Since the 1990s, China has substantially opened up its goods market to global trade. Accompanied by several other additional market reforms, trade liberalization has had a major impact on the Chinese economy, contributing to rising firm-level productivity (Yu, 2015; Brandt et al, 2017), lower markup dispersion (Lu and Yu, 2015), increased wage inequality and skill premiums (Han et al, 2012; Chen et al, 2017; Xu, 2019), and household adjustments of labor supply, saving, and co-residence (Dai et al, 2018), among other things. A few recent studies have documented both substantial job creation and job destruction within the manufacturing sector due to China’s trade liberalization policies (Ma et al, 2015; Rodriguez-Lopez and Yu, 2017). Less is known about the long-run and gender-specific effects of globalization, especially in combination with the economy-wide dynamics of market reforms.. Transformation towards a market economy has led to larger declines in the employment rates of females than of males, leading to the emergence of a more substantial gender employment gap (see Figure A.1 in the Appendix, documented by Chi and Li 2014). We address to what extent trade liberalization policies contributed to gender-specific employment trends and the growing gender employment gap

Objectives

Results

Conclusion