Mature export-led growth and gender wage inequality in Taiwan

After 1980, the Taiwanese economy was marked by technological change, growing overseas investment by Taiwanese firms, and continuing success with export-oriented manufacturing. In the manufacturing sector these developments coincided with a decline in women's employment opportunities relative to men's, a shift from wage to salaried employment, and an increase in gender wage inequality. Using industry-level panel data, this study investigates the effects of Taiwan's restructuring during this period on gender wage inequality. The most important findings are: greater export orientation adversely affects both men's and women's wages yet reduces gender wage inequality, because male employees face a greater wage penalty than women; greater capital intensity improves both men's and women's wages; and the shift toward salaried jobs improves men's wages while reducing wages of women. These results hold after controlling for the effects of female industrial crowding, female reserve labor supply, firm size, and overseas foreign direct investment.