The analysis of the effects of firm-level international trade on wages has so far focused on the role of exports, which are also typically treated as a composite good. However, we show in this paper that firm-level imports can actually be a wage determinant as important as exports. Furthermore,...

This paper studies the impact of outsourcing on individual wages. In contrast to the standard approach in the literature, we focus on domestic outsourcing as well as foreign outsourcing. By using a simple theoretical model, we argue that, if outsourcing is associated with specialization gains...

We investigate the relationship between exporting, importing, and wage premia using a rich matched employer-employee data set. We improve on the previous literature (i) by using a new methodology to quantify the contribution of an extensive set of worker- and firm-level observable and...

We analyze the evolution of the exporter wage premium (EWP) during the Great Recession and the resulting impact on wage inequality in Germany. Our results show that the EWP declined sharply between 2007 and 2008 and stagnated afterwards. This pattern is due to exporters starting to adjust their...

Since the expansion of world trade in the 1980s, measures of inequality have risen not only in developed countries, but also throughout the developing world. This stylized fact is contrary to the predictions of classical trade theory that in countries with high endowments of unskilled labor,...

Advanced industrial countries have been exhibiting a steady decline of the labor income shares in the last two decades. We explain this phenomenon by resorting to the old Stolper-Samuelson theorem. The conclusions concerning the impact of free trade on the income distribution are unambiguous in...

This paper measures the impact of sectoral composition, international trade and technological progress on the rising wage gap in Germany. I find a positive effect of the increasing importance of services on the rising wage gap in Germany that is comparable to the effects of international trade...

We analyze the most important drivers of the recent rise in overall German wage dispersion and pin down the relative contribution of central establishment and worker characteristics. Moreover, we separately investigate the drivers of between as well as within establishment wage dispersion. Using...

We show that wage setting in the Colombian manufacturing industry is not fundamentally driven by labor productivity in contrast to the standard theoretical prediction. On the contrary, internal institutional arrangements – payroll taxation, the minimum wage or the price wedge between...

In the last decades, international trade has increased between industrialised countries and between high- and low-wage countries. This important change has raised questions on how international trade affects the labour market. In this spirit, this paper aims to investigate the impact of...