The Effects of Trade on the Gender Gaps: A Model-based Quantitative Investigation

This paper investigates the role of international trade in explaining the closing gender gaps in the U.S. We build a model with two countries, each of which consists of manufacturing and service sectors as well as female and male labor. A greater female labor intensity in the service sector and an increase in imports of manufacturing varieties generate our key results. The model demonstrates that decreasing trade costs and increasing foreign manufacturing productivity lead to a rise in the service sector at home. This change increases the relative demand for female labor and raises the relative wage for female workers. Our counterfactual analysis quantifies the contribution of trade-related causes in explaining the narrowed gender gaps during the 1968-2008 period.