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Higher Wages in Exporting Firms: Self-selection, Export Effect, or Both? First Evidence from Linked Employer–Employee Data

In: Microeconometrics of International Trade

Author

Listed:
  • Thorsten Schank
  • Claus Schnabel
  • Joachim Wagner

Abstract

While it is a stylized fact that exporting firms pay higher wages than non-exporting firms, the direction of the link between exporting and wages is less clear. Using a rich set of German linked employer–employee panel data, we follow over time plants that start to export. We show that the exporter wage premium does already exist in the years before firms start to export, and that it does not increase in the following years. Higher wages in exporting firms are thus due to self-selection of more productive, better paying firms into export markets; they are not caused by export activities.

Suggested Citation

  • Thorsten Schank & Claus Schnabel & Joachim Wagner, 2016. "Higher Wages in Exporting Firms: Self-selection, Export Effect, or Both? First Evidence from Linked Employer–Employee Data," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 6, pages 215-241, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789813109698_0006
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    More about this item

    Keywords

    Microeconometrics; International Trade; Exports; Imports; Firm Performance; Productivity; Profits; Wages; Firm Survival;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • F1 - International Economics - - Trade

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