Trade and labor market segregation in Colombia

Abstract

Gary Becker's theory of discrimination argues that increasing competition will reduce discrimination by reallocating market share to less discriminatory firms. We develop a simple model in which increased competition can also affect discrimination by affecting firm-level hiring decisions. We use the 1984–1991 Colombian trade liberalization episode and plant-level data to investigate this claim. We find that plants in industries that faced the greatest reductions in tariff protection increased the female share of their workforce more than plants in industries that saw little or no reduction in tariffs. In addition, we find that exporting plants tended to employ a higher share of female workers than non-exporters did. In contrast, we find little evidence that trade liberalization drove discriminating plants from the market.