Document Type

Honors Project

Comments

Advisor: Raymond E. Robertson

The author thanks Raymond Robertson for his guidance and support throughout the completion of this project. I also thank Amy Damon, Karine Moe and Victor Addona for their valuable comments.

Abstract

This study examines the effect of trade-induced price changes on the gender wage gap in Mexico before and after the North American Free Trade Agreement (NAFTA) in 1994. By applying the Stolper-Samuelson Theorem, a result in trade theory that links relative goods prices and relative wages, this paper tests whether changes in relative prices of female-intensive goods can explain changes in female relative wages. Using household employment surveys and production data from Mexico’s National Institute of Geography and Statistics (INEGI) for the 1988 to 2010 period, we find that (1) the gender wage gap in manufacturing has increased after NAFTA and (2) there is a statistically significant and positive long-run relationship between relative output prices and relative wages.

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Economics Commons

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