infonet-economy

There are arguably potential wage gains from exports in developing countries. Export markets bring about opportunities for firms and successful exporting firms translate some of the benefits of exports to workers via employment and wage premia. Using comparable data for 61 developing and low-income countries, we document the prevalence of the export wage premia worldwide. With an extensive litterature review, we identify four major drivers of the wage premia: exporting firms hire more skilled workers, utilize more sophisticated machines, buy higher quality material inputs and are more productive than non-exporting firms. Our empirical analysis confirms the worldwide prevalence of these mechanisms and, furthermore, establishes a strong link to the estimated wage premia.