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Exports and Wage Premiums: Evidence from Mexican Employer-Employee Data

Author

Listed:
  • Judith A. Frías

    (Consejo de la Judicatura Federal)

  • David S. Kaplan

    (Inter-American Development Bank)

  • Eric Verhoogen

    (Columbia University)

  • David Alfaro-Serrano

    (Cornerstone Research)

Abstract

This paper draws on employer-employee and longitudinal plant data from Mexico to investigate the impact of exports on wage premiums, defined as wages above what workers would receive elsewhere in the labor market. We decompose plant-level average wages into a component reflecting skill composition and a component reflecting wage premiums. Using the late-1994 peso devaluation interacted with initial export propensity as a source of exogenous changes in exports, we find that exports have a significant positive effect on wage premiums and that the effect on wage premiums accounts for essentially all of the medium-term effect of exporting on plant-average wages.

Suggested Citation

  • Judith A. Frías & David S. Kaplan & Eric Verhoogen & David Alfaro-Serrano, 2024. "Exports and Wage Premiums: Evidence from Mexican Employer-Employee Data," The Review of Economics and Statistics, MIT Press, vol. 106(2), pages 305-321, March.
    • Handle: RePEc:tpr:restat:v:106:y:2024:i:2:p:305-321
    DOI: 10.1162/rest_a_01178
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