IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/12092.html
   My bibliography  Save this paper

Online Exports and the Wage Gap

Author

Listed:
  • Olarreaga, Marcelo
  • Cruz, Marcio
  • Milet, Emmanuel

Abstract

The development of the internet is often seen as a source of demand for skilled workers and therefore a potential driver of the wage gap between skilled and unskilled workers. In this paper we focus on the impact that international trade in online platforms has on the wage gap. Because online trade allows smaller firms with relatively more unskilled workers to access world markets we can a priori expect that an expansion of online exports reduces the wage gap. After correcting for potential endogeneity bias in a sample of twenty three developing countries for which we can match online trade and wage gap data, we find that a 1 percent increase in the share of online exports over GDP leads to a 0.01 percent decline in the wage gap.

Suggested Citation

  • Olarreaga, Marcelo & Cruz, Marcio & Milet, Emmanuel, 2017. "Online Exports and the Wage Gap," CEPR Discussion Papers 12092, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:12092
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP12092
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ekholm, Karolina & Midelfart, Karen Helene, 2005. "Relative wages and trade-induced changes in technology," European Economic Review, Elsevier, vol. 49(6), pages 1637-1663, August.
    2. Broda, Christian & Greenfield, Joshua & Weinstein, David E., 2017. "From groundnuts to globalization: A structural estimate of trade and growth," Research in Economics, Elsevier, vol. 71(4), pages 759-783.
    3. Augusto de la Torre & Alain Ize & Guillermo Beylis & Daniel Lederman, "undated". "Jobs, Wages and the Latin American Slowdown," World Bank Publications - Reports 22709, The World Bank Group.
    4. Christian Broda & David E. Weinstein, 2006. "Globalization and the Gains From Variety," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(2), pages 541-585.
    5. Lustig, Nora & Lopez-Calva, Luis F. & Ortiz-Juarez, Eduardo, 2013. "Declining Inequality in Latin America in the 2000s: The Cases of Argentina, Brazil, and Mexico," World Development, Elsevier, vol. 44(C), pages 129-141.
    6. Lawrence F. Katz & Kevin M. Murphy, 1992. "Changes in Relative Wages, 1963–1987: Supply and Demand Factors," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 35-78.
    7. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 705-746.
    8. Robert C. Feenstra & Gordon H. Hanson, 1999. "The Impact of Outsourcing and High-Technology Capital on Wages: Estimates For the United States, 1979–1990," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 907-940.
    9. Anders Akerman & Ingvil Gaarder & Magne Mogstad, 2015. "The Skill Complementarity of Broadband Internet," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1781-1824.
    10. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    11. Claudio E. Montenegro & Harry Anthony Patrinos, 2014. "Comparable Estimates of Returns to Schooling Around the World," Working Papers wp390, University of Chile, Department of Economics.
    12. Yeaple, Stephen Ross, 2005. "A simple model of firm heterogeneity, international trade, and wages," Journal of International Economics, Elsevier, vol. 65(1), pages 1-20, January.
    13. Gasparini, Leonardo & Galiani, Sebastian & Cruces, Guillermo & Acosta, Pablo A., 2011. "Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework, 1990-2010," IZA Discussion Papers 6244, Institute of Labor Economics (IZA).
    14. Alan B. Krueger, 1993. "How Computers Have Changed the Wage Structure: Evidence from Microdata, 1984–1989," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(1), pages 33-60.
    15. Dennis Novy, 2013. "Gravity Redux: Measuring International Trade Costs With Panel Data," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 101-121, January.
    16. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
    17. James Feyrer, 2019. "Trade and Income—Exploiting Time Series in Geography," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 1-35, October.
    18. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
    19. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    20. Jacks, David S. & Meissner, Christopher M. & Novy, Dennis, 2011. "Trade booms, trade busts, and trade costs," Journal of International Economics, Elsevier, vol. 83(2), pages 185-201, March.
    21. Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "Trading Tasks: A Simple Theory of Offshoring," American Economic Review, American Economic Association, vol. 98(5), pages 1978-1997, December.
    22. Andreas Lendle & Marcelo Olarreaga & Simon Schropp & Pierre‐Louis Vézina, 2016. "There Goes Gravity: eBay and the Death of Distance," Economic Journal, Royal Economic Society, vol. 126(591), pages 406-441, March.
    23. Ann Harrison & Margaret McMillan, 2022. "Offshoring Jobs? Multinationals And U.S. Manufacturing Employment," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 11, pages 255-273, World Scientific Publishing Co. Pte. Ltd..
    24. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    25. Lendle, Andreas & Olarrega, Marcelo & Schropp, Simon & Vézina, Pierre-Louis, 2013. "eBay’s anatomy," Economics Letters, Elsevier, vol. 121(1), pages 115-120.
    26. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 367-397.
    27. Daron Acemoglu, 2002. "Directed Technical Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 781-809.
    28. Rui Luo, 2017. "Skill Premium and Technological Change in the Very Long Run: 1300-1914," Discussion Papers in Economics 17/09, Division of Economics, School of Business, University of Leicester.
    29. Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
    30. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1169-1213.
    31. David Autor, 2014. "Polanyi's Paradox and the Shape of Employment Growth," NBER Working Papers 20485, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Olarreaga, Marcelo & Fugazza, Marco & Ugarte, Cristian, 2018. "On the heterogeneous effects of market access barriers: evidence from small and large Peruvian exporters," CEPR Discussion Papers 12876, C.E.P.R. Discussion Papers.
    2. Cirera,Xavier & Comin,Diego Adolfo & Vargas Da Cruz,Marcio Jose & Lee,Kyungmin & Soares Martins Neto,Antonio, 2021. "Firm-Level Technology Adoption in Vietnam," Policy Research Working Paper Series 9567, The World Bank.
    3. Havranek, Tomas & Irsova, Zuzana & Laslopova, Lubica & Zeynalova, Olesia, 2020. "The Elasticity of Substitution between Skilled and Unskilled Labor: A Meta-Analysis," MetaArXiv 7z2uh, Center for Open Science.
    4. Tomas Havranek & Zuzana Irsova & Lubica Laslopova & Olesia Zeynalova, 2020. "Skilled and Unskilled Labor Are Less Substitutable than Commonly Thought," Working Papers IES 2020/29, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Sep 2020.
    5. Cirera,Xavier & Comin,Diego Adolfo & Vargas Da Cruz,Marcio Jose & Lee,Kyungmin & Soares Martins Neto,Antonio, 2021. "Firm-Level Technology Adoption in the State of Ceara in Brazil," Policy Research Working Paper Series 9568, The World Bank.
    6. Cirera,Xavier & Comin,Diego Adolfo & Vargas Da Cruz,Marcio Jose & Lee,Kyungmin, 2021. "Firm-Level Adoption of Technologies in Senegal," Policy Research Working Paper Series 9657, The World Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Muendler, Marc-Andreas, 2017. "Trade, technology, and prosperity: An account of evidence from a labor-market perspective," WTO Staff Working Papers ERSD-2017-15, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.
    3. bernhard Boockmann, 2014. "Offshoring Potential and Employment Dynamics," IAW Discussion Papers 111, Institut für Angewandte Wirtschaftsforschung (IAW).
    4. Anna Sabadash, 2013. "ICT-induced Technological Progress and Employment: A Literature Review," JRC Working Papers on Digital Economy 2013-07, Joint Research Centre.
    5. Anna Sabadash, 2013. "ICT-induced Technological Progress and Employment: a Happy Marriage or a Dangerous Liaison? A Literature Review," JRC Research Reports JRC76143, Joint Research Centre.
    6. Antràs, Pol & de Gortari, Alonso & Itskhoki, Oleg, 2017. "Globalization, inequality and welfare," Journal of International Economics, Elsevier, vol. 108(C), pages 387-412.
    7. Atolia, Manoj & Kurokawa, Yoshinori, 2016. "The impact of trade margins on the skill premium: Evidence from Mexico," Journal of Policy Modeling, Elsevier, vol. 38(5), pages 895-915.
    8. Goel, Manisha, 2017. "Offshoring – Effects on technology and implications for the labor market," European Economic Review, Elsevier, vol. 98(C), pages 217-239.
    9. Gino Gancia, 2012. "Globalization, technology and inequality," Economics Working Papers 1363, Department of Economics and Business, Universitat Pompeu Fabra, revised Nov 2012.
    10. Paolo Epifani & Gino Gancia, 2008. "The Skill Bias of World Trade," Economic Journal, Royal Economic Society, vol. 118(530), pages 927-960, July.
    11. Bloom, Nicholas & Hassan, Tarek Alexander & Kalyani, Aakash & Lerner, Josh & Tahoun, Ahmed, 2021. "The diffusion of disruptive technologies," LSE Research Online Documents on Economics 113870, London School of Economics and Political Science, LSE Library.
    12. Markus Brueckner & Ngo Van Long & Joaquin L. Vespignani, 2020. "Non-Gravity Trade," Globalization Institute Working Papers 388, Federal Reserve Bank of Dallas.
    13. David J. Deming, 2017. "The Growing Importance of Social Skills in the Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(4), pages 1593-1640.
    14. David Hummels & Jakob R. Munch & Chong Xiang, 2018. "Offshoring and Labor Markets," Journal of Economic Literature, American Economic Association, vol. 56(3), pages 981-1028, September.
    15. Monte, Ferdinando, 2011. "Skill bias, trade, and wage dispersion," Journal of International Economics, Elsevier, vol. 83(2), pages 202-218, March.
    16. Guido Matias Cortes, 2016. "Where Have the Middle-Wage Workers Gone? A Study of Polarization Using Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 63-105.
    17. Gallego, Francisco A., 2012. "Skill Premium in Chile: Studying Skill Upgrading in the South," World Development, Elsevier, vol. 40(3), pages 594-609.
    18. Paula Bustos, 2005. "The impact of trade liberalization on skill upgrading. Evidence from Argentina," Economics Working Papers 1189, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2011.
    19. Santra, Sattwik, 2014. "Non-homothetic preferences: Explaining unidirectional movements in wage differentials," Journal of Development Economics, Elsevier, vol. 109(C), pages 87-97.
    20. Elizabeth J. Casabianca & Alessia Lo Turco & Claudia Pigini, 2019. "Import penetration and returns to tasks: recent evidence from the Peruvian labour market," Empirical Economics, Springer, vol. 56(2), pages 551-617, February.

    More about this item

    Keywords

    Wage gap; Online trade;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:12092. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.