Exports, Export Destinations, and Skills

47 Pages Posted: 17 May 2010 Last revised: 17 Mar 2021

See all articles by Irene Brambilla

Irene Brambilla

Universidad Nacional de La Plata

Daniel Lederman

World Bank - Latin America and Caribbean Region

Guido G. Porto

Universidad Nacional de La Plata - Faculty of Economics

Date Written: May 2010

Abstract

This paper explores the links between exports, export destinations and skill utilization by firms. We identify two mechanisms behind these links, which we integrate into a unified theory of export destinations and skills. First, exporting to high-income countries with higher valuation for quality leads to quality upgrades that are skill-intensive (Verhoogen, 2008). Second, exporting requires services such as distribution, transportation, and advertising, activities that are also intensive in skilled labor (Matsuyama, 2007). Depending on the characteristics of the source country (such as income, language), the theories suggest a skill-bias in export destinations: firms that export to high-income destinations hire more skills and pay higher wages than firms that export to middle-income countries or that sell domestically. We test the theory using a panel of Argentine manufacturing firms. The data cover the period 1998-2000 and span the Brazilian currency devaluation of 1999. We use the exogenous changes in exports and export destinations brought about by this devaluation in a major export partner to identify the causal effect of exporting and of exporting to high-income countries on skill utilization. We find that Argentine firms exporting to high-income countries hired a higher proportion of skilled workers and paid higher average wages than other exporters (to non high-income countries) and domestic firms. Instead, we cannot identify any causal effect of exporting per se on skill utilization.

Suggested Citation

Brambilla, Irene and Lederman, Daniel and Porto, Guido G., Exports, Export Destinations, and Skills (May 2010). NBER Working Paper No. w15995, Available at SSRN: https://ssrn.com/abstract=1607505

Irene Brambilla (Contact Author)

Universidad Nacional de La Plata ( email )

La Plata, Buenos Aires 1900
Argentina

Daniel Lederman

World Bank - Latin America and Caribbean Region ( email )

1818 H Street NW
Washington, DC 20433
United States

HOME PAGE: http://sites.google.com/site/danielledermanworldbank/

Guido G. Porto

Universidad Nacional de La Plata - Faculty of Economics ( email )

1900 La Plata
Argentina

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