Journal Article

Do Exporters Pay Higher Wages? Plant-level Evidence from an Export Refund Policy in Chile

Ivan T. Kandilov

in The World Bank Economic Review

Volume 23, issue 2, pages 269-294
Published in print June 2009 | ISSN: 0258-6770
Published online June 2009 | e-ISSN: 1564-698X | DOI: http://dx.doi.org/10.1093/wber/lhp004
Do Exporters Pay Higher Wages? Plant-level Evidence from an Export Refund Policy in Chile

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  • Economic Development
  • International Trade
  • Wages, Compensation, and Labour Costs

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The impact of increased export activity on plant wages is estimated in a developing country context. To avoid potential endogenous selection problems, the empirical analysis benefits from exogenous variation in exports induced by a policy experiment—an export subsidy system implemented in Chile in 1986. Analyses using data from a panel survey of Chilean manufacturing establishments show that while the export subsidy had only a modest positive impact on the industrywide relative high-skilled wage, it significantly increased the plant-level relative high-skilled wage in medium-size establishments, which are most likely to take advantage of the subsidy and enter the export market.

Keywords: O15; F16; J30; F14

Journal Article.  9701 words.  Illustrated.

Subjects: Economic Development ; International Trade ; Wages, Compensation, and Labour Costs

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