Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics

Abstract: This paper studies gender differences in the labor market reallocation of workers in Mexico as a response 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. Although the employment rate drops for both men and women, the former enter into unemployment while the latter leave the labor force. The results suggest that the drop in the female labor force participation rate is driven by their exit out of formal and especially informal work.

Keywords: Trade, Gender Inequality, Labor Market, Informal Work, Mexico

JEL-codes: F16; J16; J21; J46 July 2022

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