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Online exports and the wage gap

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  • Vargas Da Cruz,Marcio Jose
  • Milet,Emmanuel Michel Stephane
  • Olarreaga,Marcelo

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. This paper focuses 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 it can be expected a priori that an expansion of online exports reduces the wage gap. After correcting for potential endogeneity bias in a sample of 22 developing countries for which online trade and wage gap data can be matched, the study finds that a 1 percent increase in the share of online exports over GDP leads to a 0.01 percent decline in the wage gap.

Suggested Citation

  • Vargas Da Cruz,Marcio Jose & Milet,Emmanuel Michel Stephane & Olarreaga,Marcelo, 2017. "Online exports and the wage gap," Policy Research Working Paper Series 8160, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8160
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    Cited by:

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    2. Havranek, Tomas & Irsova, Zuzana & Laslopova, Lubica & Zeynalova, Olesia, 2020. "Skilled and Unskilled Labor Are Less Substitutable than Commonly Thought," EconStor Preprints 223060, ZBW - Leibniz Information Centre for Economics.
    3. Havranek, Tomas & Irsova, Zuzana & Laslopova, Lubica & Zeynalova, Olesia, 2020. "The Elasticity of Substitution between Skilled and Unskilled Labor: A Meta-Analysis," MPRA Paper 102598, University Library of Munich, Germany.

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    More about this item

    Keywords

    Labor Policies; Electronic Commerce; ICT Applications; E-Business; Rural Labor Markets; Labor Markets;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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