Dauth, Wolfgang Schmerer, Hans-Joerg Winkler, Erwin
Year of Publication:
BGPE Discussion Paper 158
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 wage-setting one year earlier than non-exporters, likely due to the sharp decrease of foreign orders starting in late 2007. Finally, our decomposition shows that the fall of the EWP had a notable negative and persistent effect on wage inequality.
exporter wage premium wage-inequality Great Recession international trade matched employer-employee data