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Learning by Exporting and Wage Profiles: New Evidence from Brazil

Xiao Ma, Marc-Andreas Muendler and Alejandro Nakab ()

MPRA Paper from University Library of Munich, Germany

Abstract: Export activity shapes workers’ experience-wage profiles. Using detailed Brazilian manufacturing employer-employee and customs data, we document that workers’ experience-wage profiles are steeper at exporters than at non-exporters. Aside from self-selection of more capable firms into exporting, we show that workers’ experience-wage profiles are steeper when firms export to high-income destinations. We then develop and quantify a model with export market entry, wage renegotiations, and human capital accumulation to interpret the data and perform counterfactual experiments. We find that human capital growth can explain roughly 40% of differences in wage profiles between exporters and non-exporters as well as the gains in experience returns after entry into high-income destinations. We also show that increased human capital per worker can account for one-half of the overall gains in real income from trade openness. In slowing human capital accumulation, trade liberalization can induce welfare losses if the trade partners are low-income destinations.

Keywords: Export Activity; Wage Profiles; Human Capital Accumulation (search for similar items in EconPapers)
JEL-codes: F10 F16 M53 (search for similar items in EconPapers)
Date: 2020-08, Revised 2021-08-31
New Economics Papers: this item is included in nep-int and nep-isf
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