NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Contribution of Trade to Wage Inequality: The Role of Skill, Gender, and Nationality

Michael W. Klein, Christoph Moser, Dieter M. Urban

NBER Working Paper No. 15985
Issued in May 2010
NBER Program(s):   IFM   ITI

International trade has been cited as a source of widening wage inequality in industrial nations. Consistent with this claim, we find a significant export wage premium for high-skilled workers in German manufacturing and an export wage discount for lower skilled workers, using matched employer-employee data. Estimates suggest that the export wage premium to high-skilled workers represents up to one third of their overall skill premium. But, while an increase in exports increases wage inequality along the dimension of skill, it diminishes the wage inequality associated with both gender and nationality. In this way, trade contributes to narrowing wage gaps and mitigating wage inequality in German manufacturing.

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Document Object Identifier (DOI): 10.3386/w15985

“Exporting, Skills, and Wage Inequality,” (with Christoph Moser and Dieter Urban), Labour Economics, forthcoming.

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