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Within‐firm wage inequality and firm‐level exports

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  • Boris Georgiev
  • Jonas Juul Henriksen

Abstract

This paper analyzes changes in within‐firm inequality of hourly wages arising from export shocks to exporting firms in Denmark. We provide causal evidence that export demand shocks increase within‐firm inequality. Decomposing overall inequality into within and between components for occupational and educational groups, the results show that exports lead to a significant increase in within‐group wage inequality but do not affect the between‐group component. We develop a partial equilibrium model, featuring heterogeneous workers, which rationalizes these observations and shows how export demand shocks induce a complementarity effect, leading to increases in wage inequality within firms.

Suggested Citation

  • Boris Georgiev & Jonas Juul Henriksen, 2020. "Within‐firm wage inequality and firm‐level exports," Review of International Economics, Wiley Blackwell, vol. 28(1), pages 1-34, February.
    • Handle: RePEc:bla:reviec:v:28:y:2020:i:1:p:1-34
    DOI: 10.1111/roie.12439
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    Cited by:

    1. Léa Marchal & Guzmán Ourens & Giulia Sabbadini, 2022. "When Immigrants Meet Exporters: A Reassessment of the Immigrant Wage Gap," CESifo Working Paper Series 10092, CESifo.
    2. Nicola Gagliardi & Benoît Mahy & François Rycx, 2020. "Trade, GVCs, and wage inequality: Theoretical and empirical insights," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(2), pages 115-134.

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