What is the effect of trade on the gender wage gap in the Mexican manufacturing sector?

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