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The Contribution of Trade to Wage Inequality: The Role of Skill, Gender, and Nationality

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  • Michael W. Klein
  • Christoph Moser
  • Dieter M. Urban

Abstract

International trade has been cited as a source of widening wage inequality in industrial nations. Consistent with this claim, we find a significant export wage premium for high-skilled workers in German manufacturing and an export wage discount for lower skilled workers, using matched employer-employee data. Estimates suggest that the export wage premium to high-skilled workers represents up to one third of their overall skill premium. But, while an increase in exports increases wage inequality along the dimension of skill, it diminishes the wage inequality associated with both gender and nationality. In this way, trade contributes to narrowing wage gaps and mitigating wage inequality in German manufacturing.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15985.

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Date of creation: May 2010
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Handle: RePEc:nbr:nberwo:15985

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Cited by:
  1. Ronald B Davies & Rodolphe Desbordesz, 2012. "Greenfield FDI and Skill Upgrading," Working Papers 201209, School Of Economics, University College Dublin.
  2. Gabriel J. Felbermayr & Andreas Hauptmann & Hans-Jörg Schmerer, 2012. "International Trade and Collective Bargaining Outcomes: Evidence from German Employer-Employee Data," Ifo Working Paper Series Ifo Working Paper No. 130, Ifo Institute for Economic Research at the University of Munich.
  3. Hartmut Egger & Udo Kreickemeier, . "Fairness, Trade, and Inequality," Discussion Papers 08/19, University of Nottingham, GEP.
  4. Hauptmann, Andreas & Schmerer, Hans-Jörg, 2013. "Do exporters pay fair-wage premiums?," Economics Letters, Elsevier, vol. 121(2), pages 179-182.
  5. Achim Schmillen, 2011. "The Exporter Wage Premium Reconsidered - Destinations, Distances and Linked Employer-Employee Data," Working Papers 111, Bavarian Graduate Program in Economics (BGPE).
  6. Maiti, Dibyendu & Mukherjee, Arijit, 2013. "Trade cost reduction, subcontracting and unionised wage," Labour Economics, Elsevier, vol. 21(C), pages 103-110.
  7. Egger, Hartmut & Egger, Peter & Kreickemeier, Udo, 2011. "Trade, Wages, and Profits," CEPR Discussion Papers 8727, C.E.P.R. Discussion Papers.
  8. Sarra Ben Yahmed, 2012. "Gender Wage Gaps across Skills and Trade Openness," Working Papers halshs-00793559, HAL.
  9. Joachim Wagner, 2011. "International Trade and Firm Performance: A Survey of Empirical Studies since 2006," Working Paper Series in Economics 210, University of Lüneburg, Institute of Economics.

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