Higher Wages in Exporting Firms: Self-Selection, Export Effect, or Both? First Evidence from German Linked Employer-Employee Data

26 Pages Posted: 3 Nov 2008

See all articles by Thorsten Schank

Thorsten Schank

University of Erlangen-Nuremberg

Claus Schnabel

University of Erlangen-Nuremberg; IZA Institute of Labor Economics

Joachim Wagner

University of Lueneburg - Institute of Economics; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics; IZA Institute of Labor Economics

Abstract

While it is a stylized fact that exporting firms pay higher wages than non-exporting firms, the direction of the link between exporting and wages is less clear. Using a rich set of German linked employer-employee panel data we follow over time plants that start to export. We show that the exporter wage premium does already exist in the years before firms start to export, and that it does not increase in the following years. Higher wages in exporting firms are thus due to self-selection of more productive, better paying firms into export markets; they are not caused by export activities.

Keywords: exports, wages, exporter wage premium, Germany

JEL Classification: F10, D21, J31

Suggested Citation

Schank, Thorsten and Schnabel, Claus and Wagner, Joachim, Higher Wages in Exporting Firms: Self-Selection, Export Effect, or Both? First Evidence from German Linked Employer-Employee Data. IZA Discussion Paper No. 3359, Available at SSRN: https://ssrn.com/abstract=1294528 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Thorsten Schank (Contact Author)

University of Erlangen-Nuremberg ( email )

Schloßplatz 4
Erlangen, DE Bavaria 91054
Germany

Claus Schnabel

University of Erlangen-Nuremberg ( email )

Institut für Wirtschaftsforschung
Lange Gasse 20
D-90403 Nuernberg
Germany
+49 911 5302 330 (Phone)
+49 911 5302 721 (Fax)

HOME PAGE: http://https://www.arbeitsmarkt.rw.fau.de/english-version/staff/prof-dr-claus-schnabel/

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

Joachim Wagner

University of Lueneburg - Institute of Economics ( email )

PO Box 2440
D-21314 Luneburg
Germany
+49 4131 677 2330 (Phone)
+49 4131 677 2026 (Fax)

HOME PAGE: http://www.uni-lueneburg.de/wifo

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

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IZA Institute of Labor Economics

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Bonn, D-53072
Germany

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