Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/62328
Authors: 
Egger, Hartmut
Egger, Peter
Kreickemeier, Udo
Year of Publication: 
2012
Series/Report no.: 
CESifo Working Paper: Trade Policy 3911
Abstract: 
This paper formulates a structural empirical model of heterogeneous firms whose workers exhibit fair-wage preferences, leading to a link between a firm's operating profits and wages of workers employed by this firm. We estimate the parameters of the model in a data-set of five European economies. The model predicts an exporter wage premium, which we find to be sizable in all countries, with nearly 10 percent on average. The estimates enable us to conduct counterfactual exercises. We find that openness to international trade has quantitatively important effects, leading to higher wage inequality and lower aggregate employment.
Subjects: 
structural models
heterogeneous firms
fair wages
labour market imperfections
exporter wage premium
JEL: 
C31
F12
F16
J31
Document Type: 
Working Paper

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