Why Ex(Im)porters Pay More:Evidence from Matched Firm-Worker Panels

We investigate the relationship between exporting, importing, and wage premia using a richmatched employer-employee data set. We improve on the previous literature (i) by using anew methodology to quantify the contribution of an extensive set of worker- and firm-levelobservable and unobservable characteristics to the wage gap, and (ii) by controlling for theimport as well as the export activity of the firm. These two innovations allow us to avoid largebiases that characterized the previous literature. A robust result is that the hiring policy ofexporters is quite different than the one of importers. While firm size and sales are, todifferent extents, important components of the wage gap both for exporters and importers,importers hire workers that are overwhelmingly more able than the average. Workers atexporting firms, on the contrary, are no different in terms of unobserved time-invariantcharacteristics. Our analysis provides a useful guidance for recent theories that aim atexplaining participation both in export and import markets and at including non-neoclassicallabor market features into trade models....