Gender-specific Exposure to Trade, Labor Market Adjustments, and the Family

Using the sharp increase in trade with China from 1995 to 2005 as a natural experiment, we examine the impact of international trade on Japan’s labor market and family formation. By exploiting sectoral differences in gender ratios and spatial variations in sectoral specialization, we construct gender-specific exposure measures to import competition from China and export opportunities to China and examine their effects. Our results show that import competition adversely affected manufacturing employment, reduced labor force participation, and increased unemployment rates, while export opportunities had the opposite effects. These labor market impacts were particularly pronounced among young individuals in their 20s and 30s. Additionally, we find that a trade-induced improvement in women’s relative labor market conditions increased the share of never-married men and women in their 30s and early 40s.