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Higher Wages in Exporting Firms: Self-Selection, Export Effect, or Both? First Evidence from German Linked Employer-Employee Data

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Author Info
Schank, Thorsten () (University of Erlangen-Nuremberg)
Schnabel, Claus () (University of Erlangen-Nuremberg)
Wagner, Joachim () (University of Lüneburg)

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Abstract

While it is a stylized fact that exporting firms pay higher wages than non-exporting firms, the direction of the link between exporting and wages is less clear. Using a rich set of German linked employer-employee panel data we follow over time plants that start to export. We show that the exporter wage premium does already exist in the years before firms start to export, and that it does not increase in the following years. Higher wages in exporting firms are thus due to self-selection of more productive, better paying firms into export markets; they are not caused by export activities.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3359.

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Length: 26 pages
Date of creation: Feb 2008
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Handle: RePEc:iza:izadps:dp3359

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Related research
Keywords: exports; wages; exporter wage premium; Germany;

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Find related papers by JEL classification:
F10 - International Economics - - Trade - - - General
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  2. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June. [Downloadable!] (restricted)
  3. Wagner, Joachim, 2002. "The causal effects of exports on firm size and labor productivity: first evidence from a matching approach," Economics Letters, Elsevier, vol. 77(2), pages 287-292, October. [Downloadable!] (restricted)
    Other versions:
  4. Akerlof, George A & Yellen, Janet L, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 255-83, May. [Downloadable!] (restricted)
  5. Thorsten Schank & Claus Schnabel & Joachim Wagner, 2006. "Do exporters really pay higher wages? First evidence from German linked employer-employee data," Working Paper Series in Economics 28, University of Lüneburg, Institute of Economics. [Downloadable!]
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  6. Andrew Bernard & Joachim Wagner, 1997. "Exports and success in German manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 133(1), pages 134-157, March. [Downloadable!] (restricted)
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  7. Joachim Wagner, 2007. "Exports and Productivity: A Survey of the Evidence from Firm-level Data," The World Economy, Blackwell Publishing, vol. 30(1), pages 60-82, 01. [Downloadable!] (restricted)
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  8. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  9. Jakob Roland Munch & Jan Rose Skaksen, 2006. "Human Capital and Wages in Exporting Firms," IZA Discussion Papers 2409, Institute for the Study of Labor (IZA). [Downloadable!]
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  10. Donald R. Davis & James Harrigan, 2007. "Good jobs, bad jobs, and trade liberalization," Discussion Papers 0607-07, Columbia University, Department of Economics. [Downloadable!]
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  11. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier. [Downloadable!] (restricted)
  12. repec:rus:hseeco:122439 is not listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Joachim Wagner, 2008. "Exporte und Firmenerfolg: Welche Firmen profitieren wie vom internationalen Handel?," Working Paper Series in Economics 81, University of Lüneburg, Institute of Economics. [Downloadable!]
    Other versions:
  2. Alcala Agullo, Francisco & Hernández Martínez, Pedro Jesús, 2006. "Firms’ Main Market, Human Capital, and Wages," Annals of Computational Economics 4102, Murcia University, DIGITUM. Universidad de Murcia. [Downloadable!]
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