Examining the Export Wage Premium in Developing Countries

There are arguably potential wage gains from exports in developing countries. Export markets bring about opportunities for firms and successful exporting firms translate some of the benefits of exports to workers via employment and wage premia. Using comparable data for 61 developing and low‐income...

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Bibliographic Details
Published inReview of international economics Vol. 25; no. 3; pp. 447 - 475
Main Authors Brambilla, Irene, Depetris Chauvin, Nicolas, Porto, Guido
Format Journal Article
LanguageEnglish
Published Oxford Blackwell Publishing Ltd 01.08.2017
Subjects
Companies
Developing countries
Economic models
Employment
Exports
Human capital
LDCs
Literature reviews
Low income groups
Markets
Skilled workers
Wages & salaries
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Summary:There are arguably potential wage gains from exports in developing countries. Export markets bring about opportunities for firms and successful exporting firms translate some of the benefits of exports to workers via employment and wage premia. Using comparable data for 61 developing and low‐income countries, we document the prevalence of the export wage premia worldwide. With an extensive literature review, we identify four major drivers of the wage premia: exporting firms hire more skilled workers, utilize more sophisticated machines, buy higher quality material inputs and are more productive than non‐exporting firms. Our empirical analysis confirms the worldwide prevalence of these mechanisms and, furthermore, establishes a strong link to the estimated wage premia.
Bibliography:The authors thank P. Garriga and L. Venturi for excellent research assistance. They have also benefitted from comments from seminar presentations at Universidad Nacional de La Plata, the University of Geneva, and DEGIT XX. All errors are our responsibility. The authors are grateful to the R4D program for Research on Global Issues for Development funded by Swiss National Science Foundation and the Swiss Development Cooperation.
ISSN:0965-7576
1467-9396
DOI:10.1111/roie.12231