Exporting, Wage Profiles, and Human Capital: Evidence from Brazil

Ma, Xiao and Muendler, Marc-Andreas and Nakab, Alejandro (2020): Exporting, Wage Profiles, and Human Capital: Evidence from Brazil.

Abstract

Export activity shapes workers’ experience-wage profiles. Using detailed Brazilian manufacturing employer-employee and customs data, we document that workers’ experience-wage profiles are steeper at exporters than at non-exporters. Aside from self-selection of more capable firms into exporting, we show that workers’ experience-wage profiles are steeper when firms export to high-income destinations. We then develop and quantify a model with firms’ export market entry, worker-firm wage bargaining, and workers’ human capital accumulation to interpret the data and perform counterfactual experiments. We find that human capital growth can explain roughly one-half of the differences in wage profiles between exporters and non-exporters as well as the gains in experience returns after entry into high-income destinations. We also show that increased human capital per worker can account for one-half of the overall gains in real income from trade openness. In slowing human capital accumulation, trade liberalization can induce welfare losses if trade partners are predominantly low-income destinations.

• Item Type: MPRA Paper
• Language: English
• Keywords: Export Activity; Wage Profiles; Human Capital Accumulation
• Subjects: F - International Economics > F1 - Trade > F10 - General; F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M5 - Personnel Economics > M53 - Training

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