Our main results can be summarized as follows: Gender differences arose both because of sorting and differential treatment and these worked in opposite directions for blue-collar workers but not for white-collar workers. Overall, sorting dominated – and was favorable to women‘s employment. Even though on average 46% of all manufacturing jobs were held by women over the period studied, women‘s net job losses accounted for only a third of all the jobs lost during the crisis. However, we find heterogeneity across occupations and types of firms. Blue-collar women suffered from unfavorable differential treatment in hiring and firing. By contrast, white collar women were more likely to retain their jobs than their male counterparts in such firms. While, the results show a large gender gap in wages, as well as substantial adjustment of wages during the crisis, there was little change in the wage gender gap during the crisis. These patterns are also mirrored in the labor force data analyzed in the appendix.

# **2 Previous Literature and Context**

# **2.1  Related Literature**

This study brings together and builds on two strands of literature that have evolved quite separately up until this point. While a large body of literature has examined gender differences in the labor market outcomes of crises and shocks, focusing especially on the supply side by concentrating on households and individuals,<sup>5</sup> few such studies have analyzed the role of employers. Conversely, the relatively small literature on firms‘ adjustment during crises has not explored whether firms‘ responses result in gender differences in wage and employment outcomes.

The literature on differences in men‘s and women‘s employment outcomes due to macroeconomic shocks has typically focused on changes brought on by either large-scale structural policy regime shifts (i.e., trade, privatization or financial liberalization) or by macroeconomic crises.<sup>6</sup>

> 5 A broader literature has explored the question of whether women bear the brunt of coping with economic shocks (see _inter alia_ , Sen and Grown, 1987) and has yielded conflicting results; in some instances women and girls suffer more severe welfare effects than men and boys in terms of health and nutrition (see, for example, Behrman, 1998; and Dercon and Krishnan, 2002); in other instances, there are no gender differences in health and education outcomes (Levine and Ames, 2003) or in household income (Cunningham and Maloney, 2000); occasionally, men suffer more than women. For example, male headed households suffered larger income losses due to macroeconomic shocks in Peru 1980s (Glewwe and Hall; 1998).

> 6 By examining how gender equity is affected by an economic crisis the paper also contributes to the growing literature on the relationship between gender equity and economic development (see e.g., Mammen and Paxson, 2000). While this literature has focused extensively on the link between growth and gender equity (see e.g., Klasen and Lamanna, 1998), it is not known whether gains in gender equity are wiped out during a crisis.  For example, it is not known whether crises inflate or reduce preexistent gender pay differences.

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