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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)

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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Bibliographic 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
Date of revision:
Handle: RePEc:lue:wpaper:28

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

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References

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  1. 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, vol. 72(1), pages 52-74, May.
  2. Pedro S. Martins, 2004. "Do Foreign Firms Really Pay Higher Wages? : Evidence from Different Estimators," CRIEFF Discussion Papers 0409, Centre for Research into Industry, Enterprise, Finance and the Firm.
  3. Bontemps, C. & Robin, J.M. & van den Berg, G.J., 1998. "Equilibrium Search with Continuous Productivity Dispersion: Theory and Non-Parametric Estimation," Papers 98-07, Centre for Labour Market and Social Research, Danmark-.
  4. Jin-Tan Liu & Meng-Wen Tsou & James Hammitt, 1999. "Export activity and productivity: Evidence from the Taiwan electronics industry," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(4), pages 675-691, December.
  5. Chin Hee Hahn, 2004. "Exporting and Performance of Plants: Evidence from Korean Manufacturing," NBER Working Papers 10208, National Bureau of Economic Research, Inc.
  6. Eric Verhoogen, 2007. "Trade, quality upgrading and wage inequality in the Mexican manufacturing sector," Discussion Papers 0607-08, Columbia University, Department of Economics.
  7. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710 Elsevier.
  8. J Bradford Jensen & Andrew B Bernard, 2001. "Why Some Firms Export," Working Papers 01-05, Center for Economic Studies, U.S. Census Bureau.
  9. Wagner, Joachim, 2001. "The causal effects of exports on firm size and labor productivity: First evidence from a matching approach," HWWA Discussion Papers 155, Hamburg Institute of International Economics (HWWA).
  10. Robert Gibbons & Lawrence F. Katz, 1989. "Does Unmeasured Ability Explain Inter-Industry Wage Differentials?," NBER Working Papers 3182, National Bureau of Economic Research, Inc.
  11. 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.
  12. David B. Audretsch & A. Roy Thurik, 1999. "Innovation, Industry Evoluation and Employment," Tinbergen Institute Discussion Papers 99-068/3, Tinbergen Institute.
  13. A. Isgut, 2001. "What's Different about Exporters? Evidence from Colombian Manufacturing," Journal of Development Studies, Taylor & Francis Journals, vol. 37(5), pages 57-82.
  14. De Loecker, Jan, 2007. "Do exports generate higher productivity? Evidence from Slovenia," Journal of International Economics, Elsevier, vol. 73(1), pages 69-98, September.
  15. 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.
  16. Joachim Wagner, 2006. "Exports, foreign direct investment, and productivity: evidence from German firm level data," Applied Economics Letters, Taylor & Francis Journals, vol. 13(6), pages 347-349.
  17. 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.
  18. Martyn Andrews & Thorsten Schank & Richard Upward, 2006. "Practical fixed-effects estimation methods for the three-way error-components model," Stata Journal, StataCorp LP, vol. 6(4), pages 461-481, December.
  19. Bernard, A., 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," Working papers 97-21, Massachusetts Institute of Technology (MIT), Department of Economics.
  20. Johannes Van Biesebroeck, 2003. "Exporting Raises Productivity in Sub-Saharan African Manufacturing Plants," NBER Working Papers 10020, National Bureau of Economic Research, Inc.
  21. 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].
  22. 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.
  23. 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.
  24. Yellen, Janet L, 1984. "Efficiency Wage Models of Unemployment," American Economic Review, American Economic Association, vol. 74(2), pages 200-205, May.
  25. José C. Fariñas & Ana Martín-Marcos, 2007. "Exporting and Economic Performance: Firm-level Evidence of Spanish Manufacturing," The World Economy, Wiley Blackwell, vol. 30(4), pages 618-646, 04.
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