Exporters and the rise in wage inequality: Evidence from German linked employer–employee data

Baumgarten, Daniel

doi:10.1016/j.jinteco.2012.10.001

Cited by 70 publications

(45 citation statements)

References 42 publications

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“…This result is in line with many models that predict trade integration to have a substantial impact on inequality (e.g. Helpman et al 2010;Egger and Kreickemeier 2012) and is consistent with recent empirical evidence Baumgarten (2013).…”

Section: Methodsupporting

confidence: 92%

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All We Need is Love? Trade-Adjustment, Inequality, and the Role of the Partner

Huber

Winkler

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may PRELIMINARY VERSIONInternational trade creates aggregate welfare gains in the long run. During the process of adjustment to trade, however, workers employed in importcompeting industries might face costs in the form of temporary unemployment or depressed wages. We examine the period of adjustment of the German economy to the increase of trade with China and former Soviet Union countries and focus on the following question: Can redistribution of gains and losses from trade between partners mitigate adverse effects on workers in importcompeting sectors? We find that due to the high level of assortative mating the trade shock affects partners similarly and this restricts the potential for redistribution. Nevertheless, couples can compensate on average 10% of the earnings losses of adversely affected workers by redistribution between partners. We then turn to the distributional consequences and find that the trade shock had a considerable inequality-increasing effect. Intra-household redistribution, however, did not help to dampen this effect. JEL-Classification: F16, J12, J31

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Section: Methodsupporting

confidence: 92%

“…The large positive effect of export exposure on annual earnings is consistent with the ex-istence of an exporter wage premium in Germany (Schank et al 2007;Baumgarten 2013). …”

Section: Resultssupporting

confidence: 59%

All We Need is Love? Trade-Adjustment, Inequality, and the Role of the Partner

Huber

Winkler

2016

SSRN Journal

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“…In the model by Egger and Kreickemeier (2012), workers employed by exporters earn higher wages than workers employed by non-exporters since wages are linked to operating prots by a fair-wage mechanism. Empirical support for the existence of such an Exporter Wage Premium (EWP) in the case of Germany is given by Schank et al (2007) and Baumgarten (2013). Hauptmann and Schmerer (2013) show that it mainly stems from a larger wage drift in exporting rms.…”

Section: Introductionmentioning

confidence: 99%

Exporters and wage inequality during the Great Recession—Evidence from Germany

2015

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“…More recent research using linked employer-employee datasets has sought to determine the sources of the exporter wage premium, including Schank et al (2007), Munch and Skaksen (2008), Frías et al (2009), Davidson et al (2014), Krishna et al (2014), and Baumgarten (2013). This literature typically makes the assumption that the matching of workers to firms is random after controlling for time-varying worker observables, firm fixed effects, worker fixed effects and in some cases match fixed effects.…”

mentioning

confidence: 99%

Trade and Inequality: From Theory to Estimation

Helpman¹,

Itskhoki²,

Muendler³

et al. 2012

146

167

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While neoclassical theory emphasizes the impact of trade on wage inequality between occupations and sectors, more recent theories of firm heterogeneity point to the impact of trade on wage dispersion within occupations and sectors. Using linked employer-employee data for Brazil, we show that much of overall wage inequality arises within sectoroccupations and for workers with similar observable characteristics; this within component is driven by wage dispersion between firms; and wage dispersion between firms is related to firm employment size and trade participation. We then extend the heterogenous-firm model of trade and inequality from Helpman et al. (2010) and estimate it with Brazilian data. We show that the estimated model provides a close approximation to the observed distribution of wages and employment. We use the estimated model to undertake counterfactuals, in which we find sizable effects of trade on wage inequality.

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Exporters and the rise in wage inequality: Evidence from German linked employer–employee data

Cited by 70 publications

References 42 publications

All We Need is Love? Trade-Adjustment, Inequality, and the Role of the Partner

All We Need is Love? Trade-Adjustment, Inequality, and the Role of the Partner

Exporters and wage inequality during the Great Recession—Evidence from Germany

Trade and Inequality: From Theory to Estimation

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