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Online exports and the skilled-unskilled wage gap

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  • Marcio Cruz
  • Emmanuel Milet
  • Marcelo Olarreaga

Abstract

The development of the Internet is often seen as a source of demand for skilled workers and therefore a potential driver of the wage gap between skilled and unskilled workers. This paper focuses on the impact that international trade in online platforms has on the skilled-unskilled wage gap. Because online trade allows smaller firms with relatively more unskilled workers to access world markets, one can expect an expansion of online exports to reduce the wage gap. After correcting for potential endogeneity bias in a sample of 22 developing countries for which online trade and wage gap data can be matched, we find that a 1 percent increase in the share of online exports over GDP leads to a 0.01 percent decline in the skilled-unskilled wage gap.

Suggested Citation

  • Marcio Cruz & Emmanuel Milet & Marcelo Olarreaga, 2020. "Online exports and the skilled-unskilled wage gap," PLOS ONE, Public Library of Science, vol. 15(5), pages 1-24, May.
    • Handle: RePEc:plo:pone00:0232396
    DOI: 10.1371/journal.pone.0232396
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    2. Marco Fugazza & Marcelo Olarreaga & Cristian Ugarte, 2018. "On the heterogeneous effects of market-access barriers: Evidence from small and large Peruvian exporters," Documentos de Trabajo 16256, The Latin American and Caribbean Economic Association (LACEA).
    3. Cirera,Xavier & Comin,Diego Adolfo & Vargas Da Cruz,Marcio Jose & Lee,Kyungmin & Soares Martins Neto,Antonio, 2021. "Firm-Level Technology Adoption in the State of Ceara in Brazil," Policy Research Working Paper Series 9568, The World Bank.
    4. Havranek, Tomas & Irsova, Zuzana & Laslopova, Lubica & Zeynalova, Olesia, 2020. "Skilled and Unskilled Labor Are Less Substitutable than Commonly Thought," EconStor Preprints 223060, ZBW - Leibniz Information Centre for Economics.
    5. Cirera,Xavier & Comin,Diego Adolfo & Vargas Da Cruz,Marcio Jose & Lee,Kyungmin, 2021. "Firm-Level Adoption of Technologies in Senegal," Policy Research Working Paper Series 9657, The World Bank.

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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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