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Is There Really an Export Wage Premium? A Case Study of Los Angeles Using Matched Employee-Employer Data

Author

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  • Sébastien Breau

    (Department of Geography, University of California, Los Angeles, sbreau@ucla.edu)

  • David L. Rigby

    (Department of Geography, University of California, Los Angeles, rigby@geog.ucla.edu)

Abstract

This article investigates the effects of exporting on wages, specifically the claim that workers are paid higher wages if they are employed in manufacturing plants that export vis-Ã -vis plants that do not. Past research on U.S. plants has supported the existence of an export wage premium, though European studies dispute those results, calling for more care in econometric investigation to control for worker characteristics. The authors answer this call by developing a matched employee-employer data set linking worker characteristics from the one-in-six long form of the Decennial Household Census to manufacturing establishment data from the Longitudinal Research Database. Analysis focuses on 1990 and 2000 data for the Los Angeles Consolidated Metropolitan Statistical Area. Results confirm that the average wage in manufacturing plants that export is larger. However, after controlling for worker characteristics such as age, gender, education, race, and nationality, the export wage premium vanishes. That is, when comparing workers with similar characteristics, there is no wage difference between exporting and nonexporting plants. These results concord with recent findings from Europe and elsewhere.

Suggested Citation

  • Sébastien Breau & David L. Rigby, 2006. "Is There Really an Export Wage Premium? A Case Study of Los Angeles Using Matched Employee-Employer Data," International Regional Science Review, , vol. 29(3), pages 297-310, July.
    • Handle: RePEc:sae:inrsre:v:29:y:2006:i:3:p:297-310
    DOI: 10.1177/0160017606289899
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    References listed on IDEAS

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    Cited by:

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    3. Max Nathan & Neil Lee, 2013. "Cultural Diversity, Innovation, and Entrepreneurship: Firm-level Evidence from London," Economic Geography, Clark University, vol. 89(4), pages 367-394, October.
    4. Julie A. Silva, 2008. "International Trade and the Changing Demand for Skilled Workers in High‐Tech Manufacturing," Growth and Change, Wiley Blackwell, vol. 39(2), pages 225-251, June.
    5. Beatriz Muriel Hernández, 2016. "An Analysis of Firm Characteristics as Earnings Determinants: The Urban Bolivia Case," Development Research Working Paper Series 04/2016, Institute for Advanced Development Studies.
    6. Kong, Dongmin & Kong, Gaowen & Pang, Lirang & Zhang, Jian, 2018. "Who gets the wage premium from export: Top managers or employees?," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 356-370.

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