Trade, Wages, and Profits

Hartmut Egger (), Peter Egger and Udo Kreickemeier

No 3911, CESifo Working Paper Series from CESifo

Abstract: This paper formulates a structural empirical model of heterogeneous firms whose workers exhibit fair-wage preferences, leading to a link between a firm’s operating profits and wages of workers employed by this firm. We estimate the parameters of the model in a data-set of five European economies. The model predicts an exporter wage premium, which we find to be sizable in all countries, with nearly 10 percent on average. The estimates enable us to conduct counterfactual exercises. We find that openness to international trade has quantitatively important effects, leading to higher wage inequality and lower aggregate employment.

Keywords: structural models; heterogeneous firms; fair wages; labour market imperfections; exporter wage premium (search for similar items in EconPapers)
JEL-codes: C31 F12 F16 J31 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Trade, wages, and profits (2013)
Working Paper: Trade, Wages, and Profits (2012)
Working Paper: Trade, Wages, and Profits (2011)
Working Paper: Trade, wages, and profits (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3911

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