When Stolper-Samuelson Does Not Apply: International Trade and Female Labor

40 Pages Posted: 8 Oct 2011

See all articles by Philip U. Sauré

Philip U. Sauré

Johannes Gutenberg University Mainz - Gutenberg School of Management and Economics; CESifo (Center for Economic Studies and Ifo Institute)

Hosny Zoabi

New Economic School (NES)

Date Written: May 6, 2011

Abstract

Whenever a country specializes on industries that use female labor intensively, its female labor force participation should increase. This intuition, which bases on the Stolper-Samuleson Theorem, may fail in a three-factor, two-good model. We develop a model where capital, male and female work are distinct factors of production. We follow an established assumption and postulate that capital accumulation closes the gender wage gap. In this setup, the Stolper-Samuleson based intuition fails necessarily: female labor shares drop in countries that specialize on sectors intensive in female labor, and vice versa. In an empirical part, we use a period of trade liberalization between the U.S. and Mexico to assess the impact of trade on female labor shares at the U.S. state level. To establish causality, bilateral trade between U.S. states and Mexico are instrumented by distance. The tests confirm our theory: exposure to trade with Mexico has increased the gender wage gap and decreased female labor shares in the U.S.

Keywords: International Trade, Factor Prices, Gender Wage Gap, Female Labor

JEL Classification: F10, F16, J16, J31

Suggested Citation

Sauré, Philip U. and Zoabi, Hosny, When Stolper-Samuelson Does Not Apply: International Trade and Female Labor (May 6, 2011). Available at SSRN: https://ssrn.com/abstract=1939962 or http://dx.doi.org/10.2139/ssrn.1939962

Philip U. Sauré

Johannes Gutenberg University Mainz - Gutenberg School of Management and Economics ( email )

Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Hosny Zoabi (Contact Author)

New Economic School (NES) ( email )

100A Novaya Street
Moscow, Skolkovo 143026
Russia

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