Exports and labor costs: Evidence from a French Policy
Clément Malgouyres () and
Thierry Mayer ()
Sciences Po publications from Sciences Po
We investigate the role that labor costs hold in exporters’ performance. To do so, we exploit a large-scale French reform that granted most firms a tax credit proportional to the wagebill of their employees paid below a given threshold. This policy effectively translated into a cut in labor cost whose magnitude varies depending on firm-specific wage structures. We use the predicted treatment intensity based on pre-reform composition of the labor force as an instrument for the actual policy-induced firm-level change in labor costs. Although our point estimates are consistent with commonly estimated firm-level trade elasticities combined with reasonable labor shares in total costs, coefficients are found to be very noisy, suggesting lack of robust evidence of a causal effect of the policy. We discuss several potential explanations for our results as well as their implications.
Keywords: Labor costs; Firm-level exports; Competitiveness (search for similar items in EconPapers)
JEL-codes: H32 F14 F16 D04 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur and nep-int
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Published in Review of World Economics, 2018, vol. 154, pp.429-454
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Journal Article: Exports and labor costs: evidence from a French policy (2018)
Working Paper: Exports and labor costs: Evidence from a French Policy (2018)
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