世界银行-将出口活动与生产率和工资率增长联系起来

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PolicyResearchWorkingPaper10737

LinkingExportActivitiestoProductivityandWageRateGrowth

LuisAguilarLuna

DeborahWinkler

WORLDBANKGROUP

Macroeconomics,TradeandInvestmentGlobalPractice

March2024

PolicyResearchWorkingPaper10737

Abstract

Thispaperexaminestherelationshipbetweentradeandjobquality,usingproductivityandwageratedataforexportandnon-exportactivitiesinasampleof60countriesacrossallincomelevelsand45sectorsspanningthewholeecon-omyover1995–2019.First,theanalysisfindsthatworkersinvolvedinexportactivitiesaremoreproductiveandbetterpaidthanthoseinnon-exportactivities.Whiletheproduc-tivitypremiumforexportactivitiesisconfirmedinlow-andmiddle-incomecountries,thereisnowageratepremium.Second,thisstudyfindsapositiverelationshipbetweenexportsandlaborproductivityatthecountry-sectorlevel,whichcanbeattributedtoproductivitygainswithinexport

activitiesaswellasspilloverstonon-exportactivities.Coun-tries’specializationinglobalvaluechainsandsectorsalsomattersfortherelationshipbetweenexportsandjobqual-ity,withmanufacturing,agriculture,andbusinessservicesshowingstrongerassociations.Thelinkbetweenexportsandthewagerateissmallerthanforproductivity.Finally,productivityandwagerategrowthdecompositionssuggestthatgrowthwithinratherthanbetweenactivitieswasthedrivingforce.Withinexportactivities,productivityandwageincreasesweredominatedbywithin-sectorgrowth,althoughlabormovementtowardmoreproductivesectorsalsomattersinlow-andmiddle-incomecountries.

ThispaperisaproductoftheMacroeconomics,TradeandInvestmentGlobalPractice.ItispartofalargereffortbytheWorldBanktoprovideopenaccesstoitsresearchandmakeacontributiontodevelopmentpolicydiscussionsaroundtheworld.PolicyResearchWorkingPapersarealsopostedontheWebat

/prwp.Theauthorsmay

becontactedatdwinkler2@.

ThePolicyResearchWorkingPaperSeriesdisseminatesthefindingsofworkinprogresstoencouragetheexchangeofideasaboutdevelopmentissues.Anobjectiveoftheseriesistogetthefindingsoutquickly,evenifthepresentationsarelessthanfullypolished.Thepaperscarrythenamesoftheauthorsandshouldbecitedaccordingly.Thefindings,interpretations,andconclusionsexpressedinthispaperareentirelythoseoftheauthors.TheydonotnecessarilyrepresenttheviewsoftheInternationalBankforReconstructionandDevelopment/WorldBankanditsaffiliatedorganizations,orthoseoftheExecutiveDirectorsoftheWorldBankorthegovernmentstheyrepresent.

ProducedbytheResearchSupportTeam

LinkingExportActivitiestoProductivity

andWageRateGrowth

LuisAguilarLuna

1

andDeborahWinkler

2

Keywords:Economicdevelopment,internationaltrade,exportactivity,laborproductivity,wagerate

JELcodes:F14,F16,F66

1Consultant,TradeandRegionalIntegration,WorldBank.

2Correspondingauthor,SeniorEconomist,TradeandRegionalIntegration,WorldBank.eMail:dwinkler2@.

Thispaperwasdevelopedfortheproject“Leveragingtradeformoreandbetterjobopportunitiesindevelopingcountries”andalsoservesasinputtotheproject“Jobsandgrowthindevelopingcountries”(bothreportsareforthcoming).TheauthorsthankSébastienDessus,AartKraay,MarylaMaliszewska,GauravNayyar,MartínRama,andShuYuforveryhelpfulsuggestionsanddiscussions.Thefindings,interpretations,andconclusionsexpressedinthispaperareentirelythoseoftheauthors.TheydonotnecessarilyrepresenttheviewsoftheWorldBankGroupanditsaffiliatedorganizations,itsExecutiveDirectorsorthegovernmentstheyrepresent.

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1.Introduction

Atthefirmlevel,evidencesuggestsapositiveassociationbetweenafirm’stradingstatusandproductivity.Exportingfirmsareonaveragemoreproductive,largerandmoreskill-intensivethandomesticfirms(e.g.,Wagner2007,2012).Whilethepositivelinkbetweenexportingandproductivity(andtoalesserextentemployment)hasbeenestablishedatthefirmlevelinlow-andmiddle-incomecountries(LMICs),positiveproductivityspilloversalsoarisefromtheavailabilityofbetterinputsandservices,aswellasengagementinglobalvaluechains(GVCs)(Alfaro-Urena,Manelici,andVasquez2022,AmitiandKonings2007,Arnold,Javorcik,andMattoo2011).Additionally,foreigndirectinvestmentcontributestopositivespillovereffects(FernandesandPaunov2012,HavranekandIrsova2011,andJavorcik2004).

ParticipationinGVCstendstomagnifytheproductivitypremiumoftraditionalone-waytrade(WorldBank2020).DemandforworkerskillstendstobehigheramongGVC-participatingfirmsrelativetonon-GVCfirmsbecauseofhigherglobalqualitystandardsimposedbyleadfirmsinGVCs(WorldEconomicForum2015;CriscuoloandTimmis2017).Higherlaborproductivityandaveragewageratescaptureaspectsofjobquality.Canaproductivityandwageratepremiumofexportingactivitiesbeconfirmedattheaggregatelevelofcountriesandsectors?

Inthispaper,werelyontheOECDTradeinEmploymentandTradeinValueAddeddatabasesfordirectestimatesofvalueadded,laborcompensation,andemploymentwhichcanbeobservedseparatelyforexportactivities

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andtherestoftheeconomy.Thedataareavailablefor45goodsandservicessectors(basedonISICRev.4sectors)spanningthewholeeconomyin60countriesacrossallincomelevelsfortheperiod1995-2020.Appendices1and2describetheunderlyingdataandcomputationsinmoredetail.

Appendices3and4giveanoverviewofthecountrysample(includingincomeclassifications)andsectorcoverage.

Thispaperfirstexaminesifworkerstiedtoexportactivitiesaremoreproductiveandarepaidhigherwageratesthanworkersinnon-exportactivities–atboththeaggregateandsectorlevelswithincountries.Toassessthisquestion,wecomputemeandifferencesbetweenexportandnon-exportactivitiesatboththecountryandcounty-sectorlevels.Wefindevidenceforaproductivitypremiumattheaggregatelevelandforthe26high-incomecountries(HICs)inthesample,whileawagepremiumcannotbeconfirmedintheremaining34low-andmiddle-incomecountries(LMICs).Ourfindings,however,rejecttheexistenceofaproductivityandwageratepremiumforexportactivitieswithincountry-sectorswhichmaybeexplainedbypositiveproductivityspilloversfromexporttonon-exportactivitieswithinsectors.

Inasecondstep,thisstudythereforeexplorestherelationshipbetweenincreasesinexportsandjobqualitywithincountry-sectorsmoreexplicitly,alsoallowingforspilloversfromexporttonon-exportactivities.Weregresslaborproductivityandwagerateonexportsatthecountry-sectorlevel.Spilloversfromexportactivitiestonon-exportactivitieswithinsectors,e.g.,duetocompetitionandlearningfromtradingfirms,canbeanadditionalsourceofproductivitygainswithincountry-sectors(e.g.,CrespoandFontoura2007,AlvarezandLopez2008).Toallowforpossiblespillovereffects,weregressproductivityandwageratesfornon-exportactivitiesonexportsinacountry-sector.Ourresultssuggestapositiveassociationbetweengrowthinexportsandjobqualityforexportactivitiesaswellaspositivespilloversfromexporttonon-exportactivities.

Besidestheproductivityincreaseswithinexportactivitiesandspilloverstonon-exportactivities,economy-wideproductivitygainsfromexportscanalsostemfromthereallocationofworkersfromlessproductivetomoreproductiveactivities–bothwithinandacrosssectors.Activitiesinthispaperreferto

3Thispaperfocusesondirectexportactivitieswithinsectors,i.e.,notaccountingforindirecteffectsindomesticsupplyingsectorsthroughinput-outputlinkages.

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twobasicgroups:exportandnon-exportactivitieswithinasector(onecanalsothinkofactivitiesofexportingandnon-exportingfirmsintheaggregate).Tounderstandwhatisdrivingaggregatelaborproductivityinacountryrequiresdecomposingproductivitygrowthintoproductivitygainswithinactivitiesandsectors,andproductivitygainsbetweenactivitiesandsectors.Productivitygainswithinasectorcan,forinstance,occurifworkersmovefromlessproductivenon-exporttomoreproductiveexportactivities.Workerscanalsomovefromlessproductivenon-exportorexportactivitiestomoreproductiveexportactivitiesbetweensectors.

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Inathirdstep,wedecomposethegrowthofcountries’aggregateproductivityandwageratestounderstandtheextenttowhichtheirgrowthisalsodrivenbymovementsofworkerstowardsmoreproductiveandbetter-paidexportactivitiesorsectors.Onechallengeofthisexercisestemsfromthefactthatourdatasetcontainsbothasectordimension(45sectors)andanactivitydimension(exportandnon-export)withinsectors.Inthispaper,weshowwithinandbetweendecompositions(i)byactivities,(ii)bysectors(forexportandnon-exportactivitiesseparately),and(iii)bysector-activitypairs.

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Eachofthesedecompositionsallowstoshedsomelightontheroleoffactorreallocationtowardsmoreproductiveactivitiesorsectors.

Ourpaperisstructuredasfollows.Section2showsbroadtrendsofaveragelaborproductivityandwageratesforexportactivitiesandtherestoftheeconomy–overallandforHICsandLMICsseparately.Italsoassesseseconometricallyatthecountrylevelifthedifferenceinobservedjobqualitybetweenexportactivitiesandtherestoftheeconomyisstatisticallysignificant.Section3exploreswhetherhigherexportsareassociatedwithincreasedproductivityandwageratesatthecountry-sectorlevel,includingthroughspilloversfromexporttonon-exportactivities.Section4proposesthreetypesofdecompositionsoflaborproductivityandwagerategrowthtounderstandtheextenttowhichtheirgrowthisdrivenbyreallocationofworkersbetweenactivities,sectors,andsector-activitypairs.Section5concludes.

2.Doexportactivitiesholdaproductivityandwageratepremiumovertherestoftheeconomy?

2.1Trendsinaveragelaborproductivityandwageratesatthecountrylevel

Overall,exportactivitiesshowastrongproductivitypremiumovertherestoftheeconomy.

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Theaveragelaborproductivityofdirectexportactivitiesislargerthanfortherestoftheeconomyinasampleof60countries(Figure1,upperleftpanel).Valueaddedperworker(in2015constantUSD)ofexportactivitiesrosefrom49.6thousandin1995to65.7thousandby2011butstagnatedoverthefollowingdecade.Splittingthesampleintotwoincomegroupssuggeststhatexportactivitiesin34LMICs(aspertheir1995incomeclassification)becamelessproductiveafter2012,droppingfromover36thousandto31thousandUSDperworkerby2020(bottomleftpanel).Bycontrast,averagelaborproductivityofexportactivitiesin26HICsincreaseduntil2018andremainedflatafterwards(middleleftpanel).Interestingly,laborproductivityintherestoftheeconomyexpandedataconstantpaceuntil2019butwashitduringCovid-19inthefullsample,andinHICsandLMICsseparately.

4Inthiscontext,itisalsoimportanttonotethatemploymentgainsfromexportsatthefirmleveldonotnecessarilymaterializeattheaggregatelevelofsectorsorcountriesifexportingfirmspullawayworkersfromdomesticfirmsorothersectors.

5Thereare90sector-activitypairs(45sectorsx2activities).

6Inthissection,weusethe‘restoftheeconomy’ratherthan‘non-exportactivities’astheseactivitiescanincludedomesticinputproductionforexportactivities.

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Figure1:Laborproductivityandwagerate,total,exportactivitiesvs.restofeconomy,1995-2020

Averagelaborproductivity(thousandUSD)

Averagewagerate(thousandUSD)

70

65

60

55

50

45

40

35

30

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Laborproductivity(inthousandUSD),total

ExportactivitiesRestoftheeconomy

28

26

24

22

20

18

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Averagewagerate(inthousandUSD),total

ExportactivitiesRestoftheeconomy

120

110

100

90

80

70

60

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Laborproductivity(inthousandUSD),HICs

ExportactivitiesRestoftheeconomy

50

45

40

35

30

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Averagewagerate(inthousandUSD),HICs

ExportactivitiesRestoftheeconomy

40

35

30

25

20

15

10

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Laborproductivity(inthousandUSD),LMICs

ExportactivitiesRestoftheeconomy

11

10

9

8

7

6

5

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Averagewagerate(inthousandUSD),LMICs

ExportactivitiesRestoftheeconomy

Source:WBstaffcomputations.Data:OECDTiE(employment,laborcompensation),OECDTiVA(valueadded)andWDI(deflators).Note:Laborproductivityisdefinedasvalueaddedperworkerandtheaveragewagerateislaborcompensationperworker(inthousandUSD)inconstant2015USD$terms.WBGincomeclassificationsasof1995.

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Similarly,theaveragelaborincomeperworkertiedtoexportactivitiesislargerthanthatfortherestoftheeconomyinthefullcountrysample.Itincreasedfrom19.6thousandUSDin1995toover27thousandUSDby2020(in2015constantUSD)forexportactivities,whileitgrewfrom18.6thousandUSDtoalmost25thousandUSDintherestoftheeconomy(Figure1,upperrightpanel).ThisfindingisdrivenbytheHICsinthesamplewherethepremiumincreasedovertime(middlerightpanel).Whiletheaveragepremiumwas2.6thousandUSDin1995,itreached6thousandUSDby2020.Bycontrast,LMICsdonotshowawagepremiumforexportactivities.Itratherappearsthatexportactivitiespaidslightlylowerwageratesthanactivitiesintherestoftheeconomyoverthisperiod(bottomrightpanel).

2.2Productivityandwagepremiuminexportactivitiesatthecountrylevel

Inthissection,wetestwhetherthelaborproductivitypremiumofexportactivitiesisstatisticallysignificant.Table1confirmsthattheaveragelaborproductivityofexportactivitiesissignificantlyhigherthanthatfortherestoftheeconomyinasampleof26HICsovertheperiod1995-2019.Weexcluded2020fromtheanalysisduetoCovid-19.Forexportactivities,averagelaborproductivityreached97.9thousandUSD(in2015constantterms)comparedto77.2thousandUSDfortherestoftheeconomy.

Similarly,thedifferenceisstatisticallysignificantinthesampleof34LMICs,withexportactivitiesshowinganaveragelaborproductivityof31.7thousandUSDcomparedto19.6thousandUSDintherestoftheeconomy.

Table1:Differenceinaveragelaborproductivity,exportactivitiesvs.restofeconomy,1995-2019,t-tests

High-incomecountries(asof1995)

Variable

Obs

Mean

Std.err.

Std.dev.

95%conf.interval

Laborproductivity,exportactivities

650

97.89292

1.986919

50.6567

93.99135

101.7945

Laborproductivity,restoftheeconomy

650

77.18721

0.850787

21.69091

75.51658

78.85784

diff

650

20.70571

1.462526

37.28725

17.83386

23.57756

mean(diff)=mean(lp_expdir-lp_rest)

t=14.1575

H0:mean(diff)=0

df=649

Ha:mean(diff)>0

Pr(T>t)=0.0000

Low-andmiddle-incomecountries(asof1995)

Variable

Obs

Mean

Std.err.

Std.dev.

95%conf.interval

Laborproductivity,exportactivities

850

31.66738

2.254097

65.71767

27.24312

36.09164

Laborproductivity,restoftheeconomy

850

19.62278

0.399976

11.66121

18.83773

20.40784

diff

850

12.04459

2.116946

61.71904

7.889534

16.19966

mean(diff)=mean(lp_expdir-lp_rest)

t=5.6896

H0:mean(diff)=0

df=849

Ha:mean(diff)>0

Pr(T>t)=0.0000

Source:WBstaffcomputations.Data:OECDTiE(employment),OECDTiVA(valueadded)andWDI(deflators).Note:lp_expdir=laborproductivityinexportactivities,lp_rest=laborproductivityinrestoftheeconomy.Laborproductivityisdefinedasvalueaddedperworker(inthousandUSD)inconstant2015USD$terms.WBGincomeclassificationsasof1995.Foradditionalinformation,seeAppendices1to4.

Figure2showsthedifferencesfor1995,2005and2019separately.InHICs,theproductivitypremiumisespeciallypronouncedincommodity-exportingcountrieslikeNorwayandSaudiArabia(andAustraliain2019),butalsoinservices-exportingcountrieslikeIreland,Luxembourg,andSwitzerland(andSingaporein2019).InLMICs,exportactivitiesshowaloweraveragelaborproductivityinseveralinstances,suchasBrazilorBulgaria.Interestingly,thereisnoevidenceforaproductivitypremiumofexportactivitiesin1995,whileitbecomesstatisticallysignificantin2005and2019.Theunderlyingt-testsforeachyearareshowninAppendices5and6.TheproductivitypremiumofexportactivitiesisparticularlyhighinKazakhstanandtheRussianFederationbutalsoMexicoin2019.

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Figure2:Differenceinaveragelaborproductivity,exportactivitiesvs.restofeconomy,1995,2005and2019

High-incomecountries,1995

Low-andmiddle-incomecountries,1995

High-incomecountries,2005

Low-andmiddle-incomecountries,2005

High-incomecountries,2019

Low-andmiddle-incomecountries,2019

Source:WBstaffcomputations.Data:OECDTiE(employment),OECDTiVA(valueadded)andWDI(deflators).Note:Laborproductivityisdefinedasvalueaddedperworker(inthousandUSD)inconstant2015USD$terms.WBGincomeclassificationsasoftheyearshowninthegraphs.ExcludesSAUin1995duetoextremelyhighvaluesinexportactivities.Foradditionalinformation,seeAppendices1to4.

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Bycontrast,LMICsdonotshowawagepremiumforexportactivitieswhichisonlyapparentinHICs.Table2showsthattheaveragewagerateofexportactivitiesissignificantlyhigherthanfortherestoftheeconomyinthesampleof26HICsovertheperiod1995-2019.Theaveragewagerateforexportactivitieswasaround44.7thousandUSD(in2015constantterms)comparedto40.2thousandUSDfortherestoftheeconomy.Inthesampleof34LMICs,exportactivitiesandtherestoftheeconomyshownowagedifference,withanaveragewagerateofbetween8.2thousandUSDand8.5thousandUSDinbothgroups.

Table2:Differenceinaveragewagerate,exportactivitiesvs.restoftheeconomy,1995-2019,t-tests

High-incomecountries(asof1995)

Variable

Obs

Mean

Std.err.

Std.dev.

95%conf.interval

Wagerate,exportactivities

650

44.6951

0.6382756

16.2729

43.44177

45.94844

Wagerate,restoftheeconomy

650

40.19281

0.5141029

13.1071

39.1833

41.20231

diff

650

4.502295

0.2002548

5.105516

4.10907

4.895521

mean(diff)=mean(w_expdir-w_rest)

t=22.4828

H0:mean(diff)=0

df=649

Ha:mean(diff)>0

Pr(T>t)=0.0000

Low-andmiddle-incomecountries(asof1995)

Variable

Obs

Mean

Std.err.

Std.dev.

95%conf.interval

Wagerate,exportactivities

850

8.189872

0.2052051

5.982707

7.787103

8.592641

Wagerate,restoftheeconomy

850

8.494331

0.1920752

5.599907

8.117333

8.871329

diff

850

-0.3044592

0.0695322

2.027194

0.4409343

0.1679841

mean(diff)=mean(w_expdir-w_rest)

t=-4.3787

H0:mean(diff)=0

df=849

Ha:mean(diff)>0

Pr(T>t)=1.0000

Source:WBstaffcomputations.Data:OECDTiE(employment),OECDTiVA(valueadded)andWDI(deflators).Note:w_expdir=wagerateinexportactivities,w_rest=wagerateinrestoftheeconomy.Thewagerateisdefinedasthelaborcompensationperworker(inthousandUSD)inconstant2015USD$terms.WBGincomeclassificationsasof1995.Foradditionalinformation,seeAppendices1to4.

Figure3showsthewagedifferencesfor1995,2005and2019separately.InHICs,thewagepremiumisparticularlystronginservices-orientedexportingcountrieslikeIreland,Luxembourg,Singapore,andSwitzerland–whichalsostoodoutintermsoftheirproductivitypremia.InLMICs,wefindahighvariationacrossthecountrysamplebutnoevidenceforawagepremiumofexportactivities.Malaysiaforinstanceshowedawagepremiumfortherestoftheeconomyinallthreeyears,whileArgentinapaidsubstantiallyhigherwagesinnon-exportactivitiesin1995.Similarly,exportactivitieswerepaidamuchlowerwagerateinBrazil,Bulgaria,andCostaRicain2019.Theunderlyingt-testsforeachyearareshowninAppendices7and8.

Overall,thefindingsimplyadecouplingofwagesfromproductivityinLMICs.Severalfactorsmayexplaintheabsenceofawagepremiumdespitetheproductivitypremium.First,researchsuggestthatparticipationinGVCscanbelinkedtodeclininglaborsharesdrivenbymorecapital-intensiveproductionwhichreducestherelativedemandforless-skilledworkers(e.g.,ReshefandSantoni2023).Newtechnologiesarerelatedtohigher-qualitystandardsandhigh-skilledlabor,raisingthebarriersforlow-skilledlaborinLMICstoparticipateinGVCs(Rodrik2018).

Second,thefactthatthereisaproductivitybutnotawagepremiumcouldbeexplainedbyuncompetitivelabormarketsthatdonotoptimallyallocateworkerstothemostproductivefirmsatmarket-clearingwagelevels.Thiscould,forexample,beduetohighersearchcostsandfrictionsinlow-incomecountries,especiallyinnon-tradableactivities,sothattheaveragewageratesdonotnecessarilyreflectthemarginalvalueproductofworkers(DonovanandSchoellman2023).

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Figure3:Differenceinaveragewagerate,exportactivitiesvs.restoftheeconomy,1995,2005and2019

High-incomecountries,1995

Low-andmiddle-incomecountries,1995

High-incomecountries,2005

Low-andmiddle-incomecountries,2005

High-incomecountries,2019

Low-andmiddle-incomecountries,2019

Source:WBstaffcomputations.Data:OECDTiE(employment),OECDTiVA(valueadded)andWDI(deflators).Note:Thewagerateisdefinedasthelaborcompensationperworker(inthousandUSD)inconstant2015USD$terms.WBGincomeclassificationsasoftheyearshowninthegraphs.Foradditionalinformation,seeAppendices1to4.

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SuchlabormarketfrictionshavebeenlinkedtolabormarketpoweroffirmswhichappearstobehigherinLMICs(Brooksetal.2021).FrictionscouldalsorelatetoinformalitywhichismoreprevalentinLMICs(LaPortaandShleifer2014).Whileinformalworkservesasabufferwhenformaljobopportunitiesarerare,itcanalsoincreasefirms’labormarketpowerwhenwageemploymentbecomesmoreappealing,puttingdownwardpressureonwages(Amodioetal.2022).Anotherpossiblefactormaybeadiscrepancybetweenthecompensationofgeneralskills(basedonexperienceandschooling)relativetofirm-specificskills(basedontenureandtraining),asobservedforKenya,althoughthelatterareassociatedwithlargerproductivitygains(vanBiesebroeck2011).

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3.Whatistherelationshipbetweenexportsandjobqualitywithincountry-sectors?

3.1Productivityandwagepremiuminexportactivitiesatthecountry-sectorlevel

WhiletheprevioussectionestablishedalaborproductivitypremiumattheaggregatelevelofcountriesforHICsandLMICs,andawagepremiumforHICs,thissectionexamineswhethersuchpremiacanalsobedetectedatthelevelofsectorswithincountries.

Wethereforespecifythefollowinglaborproductivityregressionmodel:

lnLpcsa=a+β1EX_dummycsa+Dc+Ds(1)

whereLPdesignateslaborproductivity(valueaddedperworker)inlogs,cacountry,sasector,andathetypeofeconomicactivity(directexportactivityorrestofthesector).EX_dummyisadummytakingthevalueof1ifaworkerislinkedtoanexportactivityawithinsectors,and0iftheworkerislinkedtonon-exportactivitiesinthesector.Werelyonavectorofunobservedcountryandsectorfixedeffects.

Similarly,wespecifythefollowingwagerateregressionmodel:

lnwcsa=a+β1EX_dummycsa+Dc+Ds(2)

whereWdesignatesthewagerate(laborcompensationperworker)inlogs.

Table3showsthemeandifferences,asspecifiedinequation(1)(columns1to3)andequation(2)(columns4to6).Surprisingly,ourresultsfor2019donotfindasignificantdifferenceinaverageproductivityandwageratesbetweenexportandnon-exportactivitieswithincountry-sectorsinoursampleof60countries,norifwefocusonHICsandLMICsseparately.

Theabsenceofaproductivityandwageratepremiumforexportactivitieswithincountry-sectorscouldbedrivenbyinternationallyuncompetitivesectorsintheeconomy.Focusingonsectorsonlythathavearevealedcomparativeadvantage,asdefinedbytheBalassa(1965)indexdoesnotchangeourresults.Thereseemstobenoproductivityandwageratepremiumforworkersinexportactivities(resultsavailableuponrequest).

7Whilenotthefocusofthispaper,itisimportanttohighlightthatworkerscanalsobenefitfromtradeliberalizationthroughtheconsumerchannel.ResearchfortheUnitedStatesfinds,forinstance,thatincreasedtradewithChinabenefittedconsumersthroughsubstantialpricedeclines(JaravelandSager2019).InIndia,ontheotherhand,tradeliberalizationprimarilybenefittedproducersbyprovidingthemaccesstocheaperinputsandalargervarietyofinputs,loweringtheirproductioncostswhichresultedinreducedmarginalcostsandhighermarkups.Whilethesecostsavingswerenotfullytransferredtoconsumersintheformoflowerprices,consumerscouldnonethelesshavebenefittedfromaccesstohigherqualityproductsandlonger-termdynamicgains(deLoeckeretal.2016).

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Table3:Withincountry-sectorproductivityandwagedifferencesbetweenexportactivitiesandtherestofthesector,2019

(1)

(2)

(3)

(4)

(5