Fairness and wages in Mexico's maquiladora industry: an empirical analysis of labor demand and the gender wage gap

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Abstract

In 2001, China's entry into the World Trade Organization (WTO) and the US recession put pressure on maquiladora workers' wages. The result was an increase in the gender wage gap. At the firm level, this increase is not discriminatory, in the sense that the lower income entitlement for women is socially accepted at the household level. This paper uses Akerlof and Yellen's (1990) fair wage–effort hypothesis to explain the gender wage gap as a matter of “fair-wage constraints” that differ across genders, which are, in turn, due to evolving social norms of fairness in reservation wages for men and women within households. Empirical evidence for changes in gender wages gaps across industries between 1997 and 2006 is found to be consistent with this argument.
Original languageEnglish
Pages (from-to)1-28
Number of pages28
JournalReview of Social Economy
Volume69
Issue number1
Early online date26 Oct 2010
DOIs
Publication statusPublished - Mar 2011

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