Exports and Wages: Rent Sharing, Workforce Composition or Returns to Skills?

Mario Macis and Fabiano Schivardi

No 6466, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We use linked employer-employee data from Italy to explore the relationship between exports and wages. Our empirical strategy exploits the 1992 devaluation of the Italian Lira, which represented a large and unforeseen shock to Italian firms' incentives to export. The results indicate that the export wage premium is due to exporting firms both (1) paying a wage premium above what their workers would earn in the outside labor market – the "rent-sharing" effect, and (2) employing workers whose skills command a higher price after the devaluation – the "skill composition" effect. The latter effect only emerges once we allow for the value of individual skills to differ in the pre- and post-devaluation periods. In fact, using a fixed measure of skills, as typically done in the literature, we would attribute the wage increase only to rent sharing. We also document that the export wage premium is larger for workers with more export-related experience. This indicates that the devaluation increased the demand for skills more useful for exporting, driving their relative price up.

Keywords: exports; linked employer employee data; export wage premium; wages; returns to skills; rent sharing (search for similar items in EconPapers)
JEL-codes: F16 J31 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2012-04
New Economics Papers: this item is included in nep-hrm, nep-int, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published - published in: Journal of Labor Economics, 2016, 34(4), 945 - 978

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Related works:
Journal Article: Exports and Wages: Rent Sharing, Workforce Composition, or Returns to Skills? (2016)
Working Paper: Exports and Wages: Rent Sharing, Workforce Composition or Returns to Skills? (2012)
Working Paper: Exports and Wages: Rent Sharing, Workforce Composition or Returns to Skills? (2012)
Working Paper: Exports and Wages: Rent Sharing, Workforce Composition or Returns to Skills? (2012)
Working Paper: Exports and Wages: Rent Sharing, Workforce Composition or Returns to Skills? (2012)
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