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Working Paper No. 1437

Bargaining for Trade: When Exporting Becomes Detrimental for Female Wages

Working Paper
Halvarsson, Daniel, Olga Lark, Patrik Tingvall and Josefin Videnord (2022). “Bargaining for Trade: When Exporting Becomes Detrimental for Female Wages”. IFN Working Paper No. 1437. Stockholm: Research Institute of Industrial Economics (IFN).

Daniel Halvarsson, Olga Lark, Patrik Tingvall, Josefin Videnord

In this paper, we study the link between globalization of firms and gender inequality. Specifically, we examine how the need for interpersonal contacts in trade and gender-specific differences in negotiations are related to the gender wage gap. Our key finding is that export of goods that are intensive in interpersonal contacts widens the gender wage gap. The effect is robust across various specifications and is most pronounced for domestic exporting firms, which do not trade within multinational corporations but with external foreign partners, where the contracting problem is most distinct. We ascribe this result to a male comparative advantage in bargaining.