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Learning by Exporting and Wage Profiles: New Evidence from Brazil

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  • Ma, Xiao
  • Muendler, Marc-Andreas
  • Nakab, Alejandro

Abstract

Export activity shapes workers’ experience-wage profiles. Using detailed Brazilian manufacturing employer-employee and customs data, we document that workers’ experience-wage profiles are steeper at exporters than at non-exporters. Aside from self-selection of more capable firms into exporting, we show that workers’ experience-wage profiles are steeper when firms export to high-income destinations. We then develop and quantify a model with export market entry, wage renegotiations, and human capital accumulation to interpret the data and perform counterfactual experiments. We find that human capital growth can explain roughly 40% of differences in wage profiles between exporters and non-exporters as well as the gains in experience returns after entry into high-income destinations. We also show that increased human capital per worker can account for one-half of the overall gains in real income from trade openness. In slowing human capital accumulation, trade liberalization can induce welfare losses if the trade partners are low-income destinations.

Suggested Citation

  • Ma, Xiao & Muendler, Marc-Andreas & Nakab, Alejandro, 2020. "Learning by Exporting and Wage Profiles: New Evidence from Brazil," MPRA Paper 109497, University Library of Munich, Germany, revised 31 Aug 2021.
    • Handle: RePEc:pra:mprapa:109497
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    Cited by:

    1. Arellano-Bover, Jaime & Saltiel, Fernando, 2021. "Differences in On-the-Job Learning across Firms," IZA Discussion Papers 14473, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Export Activity; Wage Profiles; Human Capital Accumulation;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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