Working Paper: NBER ID: w15985
Authors: Michael W. Klein; Christoph Moser; Dieter M. Urban
Abstract: International trade has been cited as a source of widening wage inequality in industrial nations. Consistent with this claim, we find a significant export wage premium for high-skilled workers in German manufacturing and an export wage discount for lower skilled workers, using matched employer-employee data. Estimates suggest that the export wage premium to high-skilled workers represents up to one third of their overall skill premium. But, while an increase in exports increases wage inequality along the dimension of skill, it diminishes the wage inequality associated with both gender and nationality. In this way, trade contributes to narrowing wage gaps and mitigating wage inequality in German manufacturing.
Keywords: trade; wage inequality; skill; gender; nationality
JEL Codes: F16; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increase in exports (F10) | Export wage premium for high-skilled workers (J31) |
| Increase in exports (F10) | Widening wage disparities based on skill (J31) |
| Increase in exports (F10) | Diminished wage inequality associated with gender and nationality (J79) |
| High-skilled women and non-German workers (J79) | Higher export wage premiums (F16) |
| Increased competitive pressures (L19) | Less wage discrimination in exporting firms (J79) |