Does Economic Globalization Benefit Women? Export Production, Foreign Investment, and Gender Inequality in Mexico

Andres Villarreal, University of Texas at Austin
Wei-hsin Yu, University of Texas at Austin

In this paper we examine the effect of foreign investment and export production on gender inequality in Mexico, a country that epitomizes the global shift to an open-market economic strategy. Using data from nationally representative surveys of manufacturing firms between 1992 and 2001 we find that foreign and export-oriented firms employ significantly more women at every occupational level than nationally-owned firms producing goods for sale in the domestic market. The greater employment of women in foreign and export firms cannot be explained by their higher demand for workers of lower skill levels, their size, capital intensity, or industry among other factors. Using managers’ responses to survey questions regarding their gender preferences in hiring we find that managers in foreign-owned export firms have a preference for hiring women that cannot be explained by firm-level factors and which may partly account for the observed differences in female employment.