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Do exporters really pay higher wages? First evidence from German linked employer-employee data

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Author Info
Thorsten Schank () (Institute of Economics, Friedrich-Alexander-University Erlangen-Nürnberg)
Claus Schnabel () (Institute of Economics, Friedrich-Alexander-University Erlangen-Nürnberg)
Joachim Wagner () (Institute of Economics, University of Lüneburg)

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Abstract

Many plant-level studies find that average wages in exporting firms are higher than in non-exporting firms from the same industry and region. This paper uses a large set of linked employer-employee data from Germany to analyze this exporter wage premium. We show that the wage differential becomes smaller but does not completely vanish when observable and unobservable characteristics of the employees and of the work place are controlled for. For example, blue-collar (white-collar) employees working in a plant with an export-sales ratio of 60 percent earn about 1.8 (0.9) percent more than similar employees in otherwise identical non-exporting plants.

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Publisher Info
Paper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 28.

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Length: 39 pages
Date of creation: 21 Jun 2006
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Handle: RePEc:lue:wpaper:28

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Related research
Keywords: Export; wages; exporter wage premium; linked employer-employee data; Germany;

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Find related papers by JEL classification:
F10 - International Economics - - Trade - - - General
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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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.:
  1. Roberto Alvarez & Ricardo López, 2005. "Exporting and performance: evidence from Chilean plants," Canadian Journal of Economics, Canadian Economics Association, vol. 38(4), pages 1384-1400, November. [Downloadable!] (restricted)
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    Other versions:
  5. 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:
  6. Gibbons, Robert & Katz, Lawrence F, 1992. "Does Unmeasured Ability Explain Inter-industry Wage Differentials?," Review of Economic Studies, Blackwell Publishing, vol. 59(3), pages 515-35, July. [Downloadable!] (restricted)
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  7. Verhoogen, Eric A., 2007. "Trade, Quality Upgrading and Wage Inequality in the Mexican Manufacturing Sector," CEPR Discussion Papers 6385, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  8. Wagner, Joachim, 2001. " A Note on the Firm Size-Export Relationship," Small Business Economics, Springer, vol. 17(4), pages 229-37, December. [Downloadable!] (restricted)
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  11. 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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  12. Arnold, Jens Matthias & Hussinger, Katrin, 2004. "Export Behavior and Firm Productivity in German Manufacturing : A Firm-level Analysis," ZEW Discussion Papers 04-12, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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  13. David Greenaway & Zhihong Yu, 2004. "Firm-level interactions between exporting and productivity: Industry-specific evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 140(3), pages 376-392, September. [Downloadable!] (restricted)
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  17. Gartner, Hermann & Rässler, Susanne, 2005. "Analyzing the changing gender wage gap based on multiply imputed right censored wages," IAB Discussion Paper 200505, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
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  21. Jan De Loecker, 2004. "Do Exports Generate Higher Productivity? Evidence from Slovenia," LICOS Discussion Papers 15104, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
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  22. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March. [Downloadable!]
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    Other versions:
Full references

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. Wolf Dieter Heinbach & Stefanie Schröpfer, 2007. "What a Difference Trade Makes - Export Activity and the Flexibility of Collective Bargaining Agreements," IAW Discussion Papers 35, Institut für Angewandte Wirtschaftsforschung (IAW). [Downloadable!]
    Other versions:
  2. Fryges, Helmut & Wagner, Joachim, 2008. "Exports and Profitability: First Evidence for German Manufacturing Firms," ZEW Discussion Papers 08-085, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
    Other versions:
  3. Åkerman, Anders & Forslid, Rikard, 2009. "Firm Heterogeneity and Country Size Dependent Market Entry Cost," Working Paper Series 790, Research Institute of Industrial Economics. [Downloadable!]
    Other versions:
  4. Alexander Vogel & Joachim Wagner, 2009. "Exports and Profitability – First Evidence for German Business Services Enterprises," Working Paper Series in Economics 129, University of Lüneburg, Institute of Economics. [Downloadable!]
  5. Hartmut Egger & Udo Kreickemeier, 2008. "Fairness, Trade, and Inequality," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  6. Moser, Christoph & Urban, Dieter M & Weder di Mauro, Beatrice, 2008. "International Competitiveness, Job Creation and Job Destruction - An Establishment Level Study of German Job Flows," CEPR Discussion Papers 6745, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  7. Alexander Vogel, 2009. "Exporter Performance in the German Business Services Sector: First Evidence from the Services Statistics Panel," Working Paper Series in Economics 111, University of Lüneburg, Institute of Economics. [Downloadable!]
  8. 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). [Downloadable!]
    Other versions:
  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!]
    Other versions:
  10. Joachim Wagner, 2008. "Joachim Wagner Leuphana Universität Lüneburg, e-mail: wagner@leuphana.de Exportaktivitäten und Rendite in niedersächsischen Industrieunternehmen," Working Paper Series in Economics 95, University of Lüneburg, Institute of Economics. [Downloadable!]
  11. Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2008. "Inequality and Unemployment in a Global Economy," NBER Working Papers 14478, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  12. Alcala, Francisco & Hernandez, Pedro J., 2005. "Firm characteristics, labor sorting, and wages," MPRA Paper 1226, University Library of Munich, Germany, revised 17 Jan 2007. [Downloadable!]
  13. Akerman, Anders & Forslid, Rikard, 2007. "Country Size, Productivity and Trade Share Convergence: An Analysis of Heterogenous Firms and Country Size Dependent Beachhead Costs," CEPR Discussion Papers 6545, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  14. 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!]
  15. Freund, Caroline & Pierola, Martha Denisse, 2008. "Export surges : the oower of a competitive currency," Policy Research Working Paper Series 4750, The World Bank. [Downloadable!]
  16. 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!]
  17. Francesco Serti & Chiara Tomasi & Antonello Zanfei, 2008. "Exporters, Importers and Two-way traders: The links between internationalization, skills and wage," LEM Papers Series 2008/05, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
    Other versions:
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