Trade Liberalization, Firm Heterogneity, and Wages : New Evidence from Matched Employer-Employee Data
In this paper, the authors use a linked employer-employee database from Brazil to examine the impact of trade reform on the wages of workers employed at heterogeneous firms. The analysis of the data at the firm-level confirms earlier findings of a...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110629090656 http://hdl.handle.net/10986/3476 |
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okr-10986-3476 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
AGE CATEGORIES AGE COMPOSITION AVERAGE WAGE AVERAGE WAGES CAPITAL INFLOWS CENTRAL BANK CHANGES IN TRADE COLLEGE-EDUCATED WORKERS COMPARATIVE ADVANTAGE COMPETITIVENESS CURRENCY CUSTOMS CUSTOMS UNION DEVELOPED COUNTRIES DEVELOPMENT POLICY DOMESTIC MARKET ECONOMICS LITERATURE EMPLOYEE EMPLOYMENT EMPLOYMENT COMPOSITION EMPLOYMENT HISTORY ERP EXCHANGE RATES EXPANSION EXPORT PROMOTION EXPORT PROMOTION POLICIES EXPORT VALUE EXPORTERS EXPORTS FINAL GOODS FIRM LEVEL FIRM PERFORMANCE FIRM-LEVEL ANALYSES FIRM-LEVEL ANALYSIS FOREIGN COMPETITION FOREIGN INVESTMENT FREE TRADE FREE TRADE AREA GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBALIZATION HIGH WAGES IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPORT COMPETITION IMPORT CONTROLS IMPORT PROTECTION IMPORT REGIMES IMPORT SUBSTITUTION IMPORT SUBSTITUTION ERA IMPORT SUBSTITUTION INDUSTRIALIZATION IMPORTS INFORMAL SECTOR INFORMAL TRAINING INFORMAL WORKERS INTERMEDIATE INPUTS INTERNATIONAL ECONOMICS INTERNATIONAL MARKETS INTERNATIONAL PRICES INTERNATIONAL STANDARD INTERNATIONAL TRADE JOB EXPERIENCE JOBS LABOR FORCE LABOR MARKET LABOR MARKET FUNCTIONS LABOR MARKETS MACROECONOMIC STABILIZATION MANUFACTURERS MANUFACTURING INDUSTRIES MANUFACTURING LABOR FORCE MARKET SHARE MEASURE OF TRADE MINIMUM WAGE NON-TARIFF BARRIERS OCCUPATION OCCUPATIONS OUTSOURCING PAYING JOB POLITICAL ECONOMY PREVIOUS JOB PRIMARY SCHOOL PRIMARY SCHOOL EDUCATION PRODUCTION PROCESS PRODUCTIVE FIRMS PROTECTION MEASURES PROTECTION RATES PROTECTIONIST QUANTITATIVE RESTRICTIONS RATES OF PROTECTION REAL EXCHANGE RATE REAL EXCHANGE RATES REAL WAGE REAL WAGES SKILL UPGRADING SKILLED OCCUPATIONS SKILLED WORKERS SMALL FIRMS TARIFF BARRIERS TARIFF RATES TOTAL FACTOR PRODUCTIVITY TRADE BARRIERS TRADE LIBERALIZATION TRADE OPENNESS TRADE ORIENTATION TRADE POLICY TRADE POLICY REFORM TRADE POLICY REFORMS TRADE PRICES TRADE PROTECTION TRADE REFORM TRADE REFORMS VALUE ADDED VALUE OF EXPORTS WAGE DETERMINATION WAGE EFFECT WAGE GAP WAGE IMPACT WAGE INEQUALITY WORKER WORKERS WORKFORCE SKILL |
| spellingShingle |
AGE CATEGORIES AGE COMPOSITION AVERAGE WAGE AVERAGE WAGES CAPITAL INFLOWS CENTRAL BANK CHANGES IN TRADE COLLEGE-EDUCATED WORKERS COMPARATIVE ADVANTAGE COMPETITIVENESS CURRENCY CUSTOMS CUSTOMS UNION DEVELOPED COUNTRIES DEVELOPMENT POLICY DOMESTIC MARKET ECONOMICS LITERATURE EMPLOYEE EMPLOYMENT EMPLOYMENT COMPOSITION EMPLOYMENT HISTORY ERP EXCHANGE RATES EXPANSION EXPORT PROMOTION EXPORT PROMOTION POLICIES EXPORT VALUE EXPORTERS EXPORTS FINAL GOODS FIRM LEVEL FIRM PERFORMANCE FIRM-LEVEL ANALYSES FIRM-LEVEL ANALYSIS FOREIGN COMPETITION FOREIGN INVESTMENT FREE TRADE FREE TRADE AREA GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBALIZATION HIGH WAGES IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPORT COMPETITION IMPORT CONTROLS IMPORT PROTECTION IMPORT REGIMES IMPORT SUBSTITUTION IMPORT SUBSTITUTION ERA IMPORT SUBSTITUTION INDUSTRIALIZATION IMPORTS INFORMAL SECTOR INFORMAL TRAINING INFORMAL WORKERS INTERMEDIATE INPUTS INTERNATIONAL ECONOMICS INTERNATIONAL MARKETS INTERNATIONAL PRICES INTERNATIONAL STANDARD INTERNATIONAL TRADE JOB EXPERIENCE JOBS LABOR FORCE LABOR MARKET LABOR MARKET FUNCTIONS LABOR MARKETS MACROECONOMIC STABILIZATION MANUFACTURERS MANUFACTURING INDUSTRIES MANUFACTURING LABOR FORCE MARKET SHARE MEASURE OF TRADE MINIMUM WAGE NON-TARIFF BARRIERS OCCUPATION OCCUPATIONS OUTSOURCING PAYING JOB POLITICAL ECONOMY PREVIOUS JOB PRIMARY SCHOOL PRIMARY SCHOOL EDUCATION PRODUCTION PROCESS PRODUCTIVE FIRMS PROTECTION MEASURES PROTECTION RATES PROTECTIONIST QUANTITATIVE RESTRICTIONS RATES OF PROTECTION REAL EXCHANGE RATE REAL EXCHANGE RATES REAL WAGE REAL WAGES SKILL UPGRADING SKILLED OCCUPATIONS SKILLED WORKERS SMALL FIRMS TARIFF BARRIERS TARIFF RATES TOTAL FACTOR PRODUCTIVITY TRADE BARRIERS TRADE LIBERALIZATION TRADE OPENNESS TRADE ORIENTATION TRADE POLICY TRADE POLICY REFORM TRADE POLICY REFORMS TRADE PRICES TRADE PROTECTION TRADE REFORM TRADE REFORMS VALUE ADDED VALUE OF EXPORTS WAGE DETERMINATION WAGE EFFECT WAGE GAP WAGE IMPACT WAGE INEQUALITY WORKER WORKERS WORKFORCE SKILL Krishna, Pravin Poole, Jennifer P. Senses, Mine Zeynep Trade Liberalization, Firm Heterogneity, and Wages : New Evidence from Matched Employer-Employee Data |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5711 |
| description |
In this paper, the authors use a linked
employer-employee database from Brazil to examine the impact
of trade reform on the wages of workers employed at
heterogeneous firms. The analysis of the data at the
firm-level confirms earlier findings of a differential
positive effect of trade liberalization on the average wages
at exporting firms relative to non-exporting firms. However,
this analysis of average firm-level wages is incomplete
along several dimensions. First, it cannot fully account for
the impact of a change in trade barriers on workforce
composition especially in terms of unobservable
(time-invariant) characteristics of workers (innate ability)
and any additional productivity that obtains in the context
of employment in the specific firm (match specific ability).
Furthermore, the firm-level analysis is undertaken under the
assumption that the assignment of workers to firms is
random. This ignores the sorting of worker into firms and
leads to a bias in estimates of the differential impact of
trade on workers at exporting firms relative to
non-exporting firms. Using detailed information on worker
and firm characteristics to control for compositional
effects and using firm-worker match specific effects to
account for the endogenous mobility of workers, the authors
find the differential effect of trade openness on wages in
exporting firms relative to domestic firms to be
insignificant. Consistent with the models of Helpman,
Itskhoki, and Redding (2010) and Davidson, Matusz and
Schevchenko (2008), they also find that the workforce
composition improves systematically in exporting firms in
terms of innate (time invariant) worker ability and in terms
the quality of the worker-firm matches. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Krishna, Pravin Poole, Jennifer P. Senses, Mine Zeynep |
| author_facet |
Krishna, Pravin Poole, Jennifer P. Senses, Mine Zeynep |
| author_sort |
Krishna, Pravin |
| title |
Trade Liberalization, Firm Heterogneity, and Wages : New Evidence from Matched Employer-Employee Data |
| title_short |
Trade Liberalization, Firm Heterogneity, and Wages : New Evidence from Matched Employer-Employee Data |
| title_full |
Trade Liberalization, Firm Heterogneity, and Wages : New Evidence from Matched Employer-Employee Data |
| title_fullStr |
Trade Liberalization, Firm Heterogneity, and Wages : New Evidence from Matched Employer-Employee Data |
| title_full_unstemmed |
Trade Liberalization, Firm Heterogneity, and Wages : New Evidence from Matched Employer-Employee Data |
| title_sort |
trade liberalization, firm heterogneity, and wages : new evidence from matched employer-employee data |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110629090656 http://hdl.handle.net/10986/3476 |
| _version_ |
1764387061999075328 |
| spelling |
okr-10986-34762021-04-23T14:02:10Z Trade Liberalization, Firm Heterogneity, and Wages : New Evidence from Matched Employer-Employee Data Krishna, Pravin Poole, Jennifer P. Senses, Mine Zeynep AGE CATEGORIES AGE COMPOSITION AVERAGE WAGE AVERAGE WAGES CAPITAL INFLOWS CENTRAL BANK CHANGES IN TRADE COLLEGE-EDUCATED WORKERS COMPARATIVE ADVANTAGE COMPETITIVENESS CURRENCY CUSTOMS CUSTOMS UNION DEVELOPED COUNTRIES DEVELOPMENT POLICY DOMESTIC MARKET ECONOMICS LITERATURE EMPLOYEE EMPLOYMENT EMPLOYMENT COMPOSITION EMPLOYMENT HISTORY ERP EXCHANGE RATES EXPANSION EXPORT PROMOTION EXPORT PROMOTION POLICIES EXPORT VALUE EXPORTERS EXPORTS FINAL GOODS FIRM LEVEL FIRM PERFORMANCE FIRM-LEVEL ANALYSES FIRM-LEVEL ANALYSIS FOREIGN COMPETITION FOREIGN INVESTMENT FREE TRADE FREE TRADE AREA GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBALIZATION HIGH WAGES IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPORT COMPETITION IMPORT CONTROLS IMPORT PROTECTION IMPORT REGIMES IMPORT SUBSTITUTION IMPORT SUBSTITUTION ERA IMPORT SUBSTITUTION INDUSTRIALIZATION IMPORTS INFORMAL SECTOR INFORMAL TRAINING INFORMAL WORKERS INTERMEDIATE INPUTS INTERNATIONAL ECONOMICS INTERNATIONAL MARKETS INTERNATIONAL PRICES INTERNATIONAL STANDARD INTERNATIONAL TRADE JOB EXPERIENCE JOBS LABOR FORCE LABOR MARKET LABOR MARKET FUNCTIONS LABOR MARKETS MACROECONOMIC STABILIZATION MANUFACTURERS MANUFACTURING INDUSTRIES MANUFACTURING LABOR FORCE MARKET SHARE MEASURE OF TRADE MINIMUM WAGE NON-TARIFF BARRIERS OCCUPATION OCCUPATIONS OUTSOURCING PAYING JOB POLITICAL ECONOMY PREVIOUS JOB PRIMARY SCHOOL PRIMARY SCHOOL EDUCATION PRODUCTION PROCESS PRODUCTIVE FIRMS PROTECTION MEASURES PROTECTION RATES PROTECTIONIST QUANTITATIVE RESTRICTIONS RATES OF PROTECTION REAL EXCHANGE RATE REAL EXCHANGE RATES REAL WAGE REAL WAGES SKILL UPGRADING SKILLED OCCUPATIONS SKILLED WORKERS SMALL FIRMS TARIFF BARRIERS TARIFF RATES TOTAL FACTOR PRODUCTIVITY TRADE BARRIERS TRADE LIBERALIZATION TRADE OPENNESS TRADE ORIENTATION TRADE POLICY TRADE POLICY REFORM TRADE POLICY REFORMS TRADE PRICES TRADE PROTECTION TRADE REFORM TRADE REFORMS VALUE ADDED VALUE OF EXPORTS WAGE DETERMINATION WAGE EFFECT WAGE GAP WAGE IMPACT WAGE INEQUALITY WORKER WORKERS WORKFORCE SKILL In this paper, the authors use a linked employer-employee database from Brazil to examine the impact of trade reform on the wages of workers employed at heterogeneous firms. The analysis of the data at the firm-level confirms earlier findings of a differential positive effect of trade liberalization on the average wages at exporting firms relative to non-exporting firms. However, this analysis of average firm-level wages is incomplete along several dimensions. First, it cannot fully account for the impact of a change in trade barriers on workforce composition especially in terms of unobservable (time-invariant) characteristics of workers (innate ability) and any additional productivity that obtains in the context of employment in the specific firm (match specific ability). Furthermore, the firm-level analysis is undertaken under the assumption that the assignment of workers to firms is random. This ignores the sorting of worker into firms and leads to a bias in estimates of the differential impact of trade on workers at exporting firms relative to non-exporting firms. Using detailed information on worker and firm characteristics to control for compositional effects and using firm-worker match specific effects to account for the endogenous mobility of workers, the authors find the differential effect of trade openness on wages in exporting firms relative to domestic firms to be insignificant. Consistent with the models of Helpman, Itskhoki, and Redding (2010) and Davidson, Matusz and Schevchenko (2008), they also find that the workforce composition improves systematically in exporting firms in terms of innate (time invariant) worker ability and in terms the quality of the worker-firm matches. 2012-03-19T18:03:08Z 2012-03-19T18:03:08Z 2011-06-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110629090656 http://hdl.handle.net/10986/3476 English Policy Research working paper ; no. WPS 5711 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |