Journal of International Economics · 2026 · Pamela Medina、Sebastian Sotelo、Daniel Velasquez-Cabrera
Abstract
We examine how trade influences female labor supply through reductions in the prices of household appliances that substitute for domestic labor. Using a comprehensive data set from 1981 to 2017, which includes four population censuses, household surveys, and customs records from Peru, we show that labor force participation rose at the same time that appliance import prices fell. We then develop and estimate a dynamic general equilibrium model of trade and household production, to quantitatively evaluate the aggregate impact of declining appliance prices. We find that the reduction in appliance prices during the sample period leads to an increase in female labor force participation that explains one-tenth of the total rise in female labor participation in Peru over the past 30 years. However, the gender wage gap widens by approximately 3 percentage points in response to these changes.