The Contribution of Trade to Wage Inequality: The Role of Skill, Gender, and Nationality
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.
Document Object Identifier (DOI): 10.3386/w15985
Published: Labour Economics Volume 25, December 2013, Pages 76–85 European Association of Labour Economists 24th Annual Conference, Bonn, Germany, 20-22 September 2012 Cover image Exporting, skills and wage inequality ☆ Michael W. Kleina, , Christoph Moserb, , , Dieter M. Urbanc, 1
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