Several empirical studies have shown that the effect of openness on the gender wage gap depends on the skill requirement of the workplace. This paper offers a theoretical explanation for that finding.
We integrate a statistical discrimination framework with the labour assignment approach to give general conditions under which the matching between firms and workers gives rise to a wider gender wage gap at the upper tail of the distribution. Workers’ characteristics vary in two dimensions, skills and labour market attachment. The inability to observe individual’s labour market attachment induces employers to base partly their decision on group average. Firms simultaneously choose their technology and the workers they hire. Following the literature on labour and international trade, we assume that skills act as complements to technological upgrading. Exporting firms that are more productive, are also more skill-intensive and pay higher wages ; assuming further that worker’s job commitment is a complement to technological upgrading, we find that a reduction in trade costs increases the gender wage gap among high-skill workers, in line with empirical evidence.