Working Paper: CEPR ID: DP12092
Authors: 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. 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.
Keywords: wage gap; online trade
JEL Codes: F14; J31; L86
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 1 percent increase in share of online exports over GDP (F69) | 0.01 percent decline in wage gap (J79) |
| total exports, relative supply of skilled workers, internet users (F66) | reduction in wage gap (J79) |
| increase in online exports (F10) | reduction in wage gap (J79) |
| online exports (F10) | reduction in wage gap (J79) |