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

43 Pages Posted: 14 Apr 2012  

Mario Macis

Johns Hopkins University - Carey Business School; IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

Fabiano Schivardi

Einaudi Institute for Economics and Finance (EIEF); Luiss Guido Carli - Department of Economics and Finance; Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research

Multiple version iconThere are 3 versions of this paper

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: export wage premium, linked employer employee data, exports, wages, returns to skills, rent sharing

JEL Classification: F16, J31

Suggested Citation

Macis, Mario and Schivardi, Fabiano, Exports and Wages: Rent Sharing, Workforce Composition or Returns to Skills?. IZA Discussion Paper No. 6466. Available at SSRN: https://ssrn.com/abstract=2039652

Mario Macis (Contact Author)

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Fabiano Schivardi

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Due Macelli, 73
Rome, 00187
Italy

Luiss Guido Carli - Department of Economics and Finance ( email )

Viale Romania 32
Rome, Rome 00187
Italy

Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research ( email )

Via Roentgen 1
Milan, 20136
Italy

Paper statistics

Downloads
22
Abstract Views
326