Import Shocks and Gendered Labor Market Responses: Evidence from Mexico

Abstract

This paper studies gender differences in labor market responses of workers in Mexico to trade liberalization with China. To measure exposure to import competition, I exploit variation in the initial industry structure of Mexican local labor markets. I show that aggregate outcomes mask heterogeneous responses based on gender. Both women and men experience lower growth in employment shares but the change in the labor force participation rate is negatively affected for men and positively affected for women. Further analysis shows that women move into self-employment and that informal employment acts as a “buffer” to attenuate negative employment effects, especially for male workers.