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Trade, Technology and Gender Wage Gap

A Case of Japan

Fall 2007

By Yumiko Yamamoto

ABSTRACT: The present study aims at assessing the impacts of increases in international trade on gender wage discrimination in Japan; first by using interactive variables of trade and concentration of the firm in industries and secondly by using that of trade and high-tech industries. The according to neoclassical theory, increased international competition will reduce gender wage inequality due to less incentive for employers to discriminate against women as the discrimination becomes costly. This effect should be stronger among domestically concentrated industries, where employers could afford to cover the costs of discrimination as compared to competitive industries which were already taking cost-cutting strategies including efficient hiring practices. Similarly, high-tech industries which produce and export innovated goods could afford the costs of discrimination because the price premiums they can have for such luxury goods. Again, according to neoclassical theory, increased international trade will reduce gender wage inequality in high-tech industries more than in low-tech industries, which had an early start for price competition. Results for the case of Japan contradicts with neoclassical argument; increased international competition, especially the one from Asian neighbouring countries, is positively associated with wage discrimination against women in all industries, resulting in wider gender wage gap. As for export share, gender wage gap widened in competitive (or low-tech) industries that experienced greater increase in export share than in those that experienced little exports. Among concentrated (or high-tech) industries, an increase in exports reduced gender wage inequality.

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Read More: Gender, Jobs, Technology, Trade, Japan, Asia

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