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Skills, exports, and the wages of five million Latin American workers

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  • Brambilla, Irene
  • Carneiro, Rafael Dix
  • Lederman, Daniel
  • Porto, Guido

Abstract

The returns to schooling or the skill premium is a key parameter in various literatures, including globalization and inequality and international migration. This paper explores the skill premium and its link to exports in Latin America, thus linking the skill premium to the emerging literature on the structure of trade and development. Using data on employment and wages for over five million workers in sixteen Latin American economies, the authors estimate national and industry-specific skill premiums and study some of their determinants. The evidence suggests that both country and industry characteristics are important in explaining skill premiums. The analysis also suggests that the incidence of exports within industries, the average income per capita within countries, and the relative abundance of skilled workers are related to the underlying industry and country characteristics that explain skill premiums. In particular, higher sectoral exports are positively linked with the skill premium at the industry level, a result that supports recent trade models linking exports with wages and the demand for skills.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5246.

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Date of creation: 01 Mar 2010
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Handle: RePEc:wbk:wbrwps:5246

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Related research

Keywords: Labor Markets; Water and Industry; Tertiary Education; Labor Policies; Inequality;

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Cited by:
  1. Gasparini, Leonardo & Galiani, Sebastian & Cruces, Guillermo & Acosta, Pablo A., 2011. "Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework, 1990-2010," IZA Discussion Papers 6244, Institute for the Study of Labor (IZA).
  2. Porto, Guido, 2012. "The cost of adjustment to green growth policies : lessons from trade adjustment costs," Policy Research Working Paper Series 6237, The World Bank.
  3. Fu, Dahai & Wu, Yanrui, 2013. "Export wage premium in China's manufacturing sector: A firm level analysis," China Economic Review, Elsevier, Elsevier, vol. 26(C), pages 182-196.
  4. Thomas Sampson, 2011. "Assignment Reversals: Trade, Skill Allocation and Wage Inequality," CEP Discussion Papers, Centre for Economic Performance, LSE dp1105, Centre for Economic Performance, LSE.

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