Publication: Linking Export Activities to Productivity and Wage Rate Growth
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Date
2024-03-26
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Published
2024-03-26
Author(s)
Aguilar Luna, Luis
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Abstract
This paper examines the relationship between trade and job quality, using productivity and wage rate data for export and non-export activities in a sample of 60 countries across all income levels and 45 sectors spanning the whole economy over 1995–2019. First, the analysis finds that workers involved in export activities are more productive and better paid than those in non-export activities. While the productivity premium for export activities is confirmed in low- and middle-income countries, there is no wage rate premium. Second, this study finds a positive relationship between exports and labor productivity at the country-sector level, which can be attributed to productivity gains within export activities as well as spillovers to non-export activities. Countries’ specialization in global value chains and sectors also matters for the relationship between exports and job quality, with manufacturing, agriculture, and business services showing stronger associations. The link between exports and the wage rate is smaller than for productivity. Finally, productivity and wage rate growth decompositions suggest that growth within rather than between activities was the driving force. Within export activities, productivity and wage increases were dominated by within-sector growth, although labor movement toward more productive sectors also matters in low- and middle-income countries.
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“Aguilar Luna, Luis; Winkler, Deborah. 2024. Linking Export Activities to Productivity and Wage Rate Growth. Policy Research Working Paper; 10737. © World Bank. http://hdl.handle.net/10986/41290 License: CC BY 3.0 IGO.”
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