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The Exporter Wage Premium Reconsidered - Destinations, Distances and Linked Employer-Employee Data

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  • Achim Schmillen

Abstract

This study uses detailed, reliable and up-to-date linked employer-employee data that take account of both the demand and the supply side of the labor market to challenge the conventional wisdom of a universal exporter wage premium. It investigates whether for German establishments an exporter wage premium can be found irrespective of export destination and the distance between export origin and destination. As expected, it finds that exporters generally pay higher wages than non-exporters. But it also shows that only exporting to certain countries is associated with a wage premium. Moreover, such a premium exists only for establishments that ship goods over a relatively long distance.

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File URL: http://www.bgpe.de/texte/DP/111_Schmillen.pdf
File Function: First version, 2011
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Bibliographic Info

Paper provided by Bavarian Graduate Program in Economics (BGPE) in its series Working Papers with number 111.

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Length: 22 pages
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:bav:wpaper:111_schmillen

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Web page: http://www.bgpe.de/
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Keywords: Exporter wage premium; Export destinations; Linked employer-employee data;

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References

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  1. Matthew A Cole & Robert J R Elliott & Supreeya Virakul, 2009. "Firm Heterogeneity, Origin of Ownership and Export Participation," Discussion Papers, Department of Economics, University of Birmingham 09-16, Department of Economics, University of Birmingham.
  2. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, American Economic Association, vol. 98(4), pages 1707-21, September.
  3. Verhoogen, Eric, 2007. "Trade, Quality Upgrading and Wage Inequality in the Mexican Manufacturing Sector," IZA Discussion Papers 2913, Institute for the Study of Labor (IZA).
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  5. Schank, Thorsten & Schnabel, Claus & Wagner, Joachim, 2007. "Do exporters really pay higher wages? First evidence from German linked employer-employee data," Journal of International Economics, Elsevier, Elsevier, vol. 72(1), pages 52-74, May.
  6. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 123(2), pages 441-487, 05.
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  8. Holger Alda & Stefan Bender & Hermann Gartner, 2005. "European Data Watch: The linked employer-employee dataset created from the IAB establishment panel and the process-produced data of the IAB (LIAB)," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, Duncker & Humblot, Berlin, vol. 125(2), pages 327-336.
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  11. Vincenzo Verardi & Joachim Wagner, 2010. "Productivity premia for German manufacturing firms exporting to the Euro-area and beyond: First evidence from robust fixed effects estimations," Working Paper Series in Economics 172, University of Lüneburg, Institute of Economics.
  12. Munch, Jakob Roland & Skaksen, Jan Rose, 2008. "Human capital and wages in exporting firms," Journal of International Economics, Elsevier, Elsevier, vol. 75(2), pages 363-372, July.
  13. Kiminori Matsuyama, 2007. "Beyond Icebergs: Towards a Theory of Biased Globalization," Review of Economic Studies, Oxford University Press, vol. 74(1), pages 237-253.
  14. Steffen Mueller, 2008. "Capital Stock Approximation using Firm Level Panel Data, A Modified Perpetual Inventory Approach," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 228(4), pages 357-371, August.
  15. Mark J. Melitz, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," NBER Working Papers 8881, National Bureau of Economic Research, Inc.
  16. Schank, Thorsten & Schnabel, Claus & Wagner, Joachim, 2008. "Higher Wages in Exporting Firms: Self-Selection, Export Effect, or Both? First Evidence from German Linked Employer-Employee Data," IZA Discussion Papers 3359, Institute for the Study of Labor (IZA).
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  19. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ Methodenreport, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] 200502_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  20. Daniel Baumgarten, 2010. "Exporters and the Rise in Wage Inequality – Evidence from German Linked Employer-Employee Data," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0217, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
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Cited by:
  1. Felbermayr, Gabriel & Hauptmann, Andreas & Schmerer, Hans-Jörg, 2012. "International trade and collective bargaining outcomes : evidence from German employer-employee data," IAB Discussion Paper 201207, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum, 2013. "The rise of the East and the Far East: German labor markets and trade integration," UBSCENTER - Working Papers, UBS International Center of Economics in Society - Department of Economics - University of Zurich 003, UBS International Center of Economics in Society - Department of Economics - University of Zurich.

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