The exporter wage premium when firms and workers are heterogeneous

Hartmut Egger (), Peter Egger, Udo Kreickemeier and Christoph Moser

No 12/17, CEPIE Working Papers from Technische Universität Dresden, Center of Public and International Economics (CEPIE)

Abstract: We set up a trade model with heterogeneous firms and a worker population that is heterogeneous in two dimensions: workers are either skilled or unskilled, and within each skill category there is a continuum of abilities. Workers with high abilities, both skilled and unskilled, are matched to firms with high productivities, and this leads to wage differentials within each skill category across firms. Self-selection of the most productive firms into exporting generates an exporter wage premium, and our framework with skilled and unskilled workers allows us to decompose this premium into its skill-specific components. We employ linked employer-employee data from Germany to structurally estimate the parameters of the model. Using these parameter estimates, we compute an average exporter wage premium of 5 percent. The decomposition by skill turns out to be quantitatively highly relevant, with exporting firms paying no wage premium at all to their unskilled workers, while the premium for skilled workers is 12 percent.

Keywords: Exporter wage premium; Heterogeneous firms; Ability differences of workers; Positive assortative matching; Trade and wage inequality (search for similar items in EconPapers)
JEL-codes: C31 F12 F15 J31 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-eur, nep-int and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/167595/1/89541788X.pdf (application/pdf)

Related works:
Journal Article: The exporter wage premium when firms and workers are heterogeneous (2020)
Working Paper: The Exporter Wage Premium When Firms and Workers Are Heterogeneous (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:tudcep:1217

Access Statistics for this paper

More papers in CEPIE Working Papers from Technische Universität Dresden, Center of Public and International Economics (CEPIE) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().