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Online Exports and the Wage Gap

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  • Cruz, Marcio
  • Milet, Emmanuel
  • Olarreaga, Marcelo

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. In this paper we focus on the impact that international trade in online platforms has on the wage gap. Because online trade allows smaller firms with relatively more unskilled workers to access world markets we can a priori expect that an expansion of online exports reduces the wage gap. After correcting for potential endogeneity bias in a sample of twenty three developing countries for which we can match online trade and wage gap data, we find that a 1 percent increase in the share of online exports over GDP leads to a 0.01 percent decline in the wage gap.

Suggested Citation

  • Cruz, Marcio & Milet, Emmanuel & Olarreaga, Marcelo, 2017. "Online Exports and the Wage Gap," CEPR Discussion Papers 12092, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:12092
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    References listed on IDEAS

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    More about this item

    Keywords

    online trade; wage gap;

    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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