We find that there is a significant export wage premium for workers in the two highest skill categories and evidence of an export wage discount for lower-skilled workers. The export wage premium for higher-skilled workers combined with the wage discount for lower-skilled workers implies an increase in manufacturing wage disparities with an expansion in the number of plants that export, or with an increase in the share of exports relative to total manufacturing output.
While the use of four constructed skill categories simplifies the presentation of our results, we find very similar results when estimating the export wage premium or discount across 340 occupations defined in the data set.
[...]Another set of results presented in our research shows that an increase in exports diminishes manufacturing wage gaps due to gender or nationality. Higher-skilled women, who are paid less than men with comparable personal characteristics in comparable plants, enjoy a higher export wage premium than men, and there is no evidence of an export wage discount for medium-skilled and lower-skilled women. Likewise, higher-skilled manufacturing workers who are not German citizens enjoy an export wage premium and there is not a significant export wage discount for these workers either.
Our research shows that the links between trade and inequality are subtle. An increase in the average export share of the German economy raises wage inequality along
the dimension of skill. But this same shift in the economic profile of the economy lowers wage inequality along the dimensions of gender and citizenship. These effects point out the potentially complex role of increasing globalisation on wage inequality.