Human Capital and Wages in Exporting Firms

This paper studies the link between a firms education level, export performance and wages of its workers. We argue that firms may escape intense competition in international markets by using high skilled workers to differentiate their products. This story is consistent with our empirical results. Using a very rich matched worker-firm longitudinal dataset we find that firms with high export intensities pay higher wages. However, an interaction term between export intensity and skill intensity has a positive impact on wages and it absorbs the direct effect of the export intensity. That is, we find an export wage premium, but it accrues to workers in firms with high skill intensities.exports; wages; human capital; rent sharing; matched worker- firm data

Do Immigrants Take the Jobs of Native Workers?

In this paper, we focus on the short-run adjustments taking place at the workplace level when immigrants are employed. Specifically, we analyse whether individual native workers are replaced or displaced by the employment of immigrants within the same narrowly defined occupations at the workplace. For this purpose, we estimate a competing risks duration model for job spells of native workers that distinguishes between job-to-job and job-to-unemployment transitions. In general, we do not find any signs of native workers being displaced by immigrants. Furthermore, we find only very limited signs of replacement of native workers by immigrants. Instead, in particular low-skilled native workers are less likely to lose or leave their jobs when the firms hire immigrants.immigration, adjustment costs, displacement, job spells, duration model

Do Foreign Experts Increase the Productivity of Domestic Firms?

While most countries welcome (and some even subsidise) high-skilled immigrants, there is very limited evidence of their importance for domestic firms. To guide our empirical analysis, we first set up a simple theoretical model to show how foreign experts may impact on the productivity and wages of domestic firms. Using matched worker-firm data from Denmark and a difference-indifferences matching approach, we then find that firms that hire foreign experts – defined as employees eligible for reduced taxation under the Danish "Tax scheme for foreign researchers and key employees" – both become more productive (pay higher wages) and increase their exports of goods and services.foreign experts, export, immigrants, productivity, difference-in-differences matching

A Disaggregate Perspective

Skill-Biased Technological Change in Denmark: A Disaggregate Perspective* In this paper, we provide an industry-level analysis of skill-biased technological change (SBTC) in Denmark over the last two decades. The analysis shows that SBTC has varied considerably across industries, and traditionally large Danish industries have experienced relatively less SBTC. This may partly explain why wage inequality between skilled and less skilled has risen less in Denmark than in other countries. We also find that SBTC has been concentrated in already skill-intensive industries. This contains important information about future labour requirements, as the relative importance of these industries must be expected to grow, thereby reinforcing the shift in demand for skilled labour. JEL Classification: J24, J31, L6 Keywords: skill-biased technological change, Danish industrie

Should Native Workers Welcome Foreign Workers in Upturns ?

In this paper, we show that the welfare implications of immigration which takes place in upturns, and may be partly reversed in downturns, are very different from the implications of immigration usually found in static models. Abstracting from any gains to capital owners and native workers due to complementarities, we find that (especially temporary) immigration may still benefit native workers in a European type of labour market where minimum wages may bind in downturns. However, in the presence of hiring costs, these effects may be reversed. Thus, promoting temporary immigration schemes may lead to adverse consequences if they also increase the costs of hiring foreign labour

Human Capital and Wages in Exporting Firms

This paper studies the link between a firms education level, export performance and wages of its workers. We argue that firms may escape intence competition in international markets by using high skilled workers to differentiate their products. This story is consistent with our empirical results. Osing a very rich matched worker-firm longitudinal dataset we find that firms with high export intensities pay higher wages. However, an interaction term between export intensity and skill intensity has a positive impact on wages and it absorbs the direct effect of the export intensity. That is, we find an export wage premium, but it accrues to workers in firms with high skill intensities. Keywords: Exports, Wages, Human Capital, Rent Sharing, Matched Worker-Firm Data JEL Classification: J30, F10, I2

Labour Market Implications of a Compressed Wage Structure when Education and Training are Endogenous

We consider the economic implications of a compressed wage structure which is exogenously determined by institutions. An important feature of our analysis is that human capital is endogenous and can be achieved either as formal education or as informal training within firms after entering the labour market. While institutional wage compression decreases the incentives of individuals to become educated, it increases the incentives of firms to invest in training. As a result, the net effects of wage compression on the aggregate human capital level and GDP are ambiguous. Moreover, with wage compression, a skillbiased technological change may cause wage inequality to decrease. Keywords: Wage compression, training, education, inequality, institutions, skill-biased technological change. JEL: I21, J31, J5, O33

Product Market Integration, Comparative Advantages and Labour Market Performance

Product Market Integration, Comparative Advantages and Labour Market Performance* In a two-country model with trade driven by comparative advantages, it is considered how imperfectly competitive labour markets are affected by lower frictions in international goods trade. Easier goods trading is equivalent to increased mobility of employment across countries and thus a change in the trade-off between wages and employment faced by wage setters. While the effects of product market integration on the trade-off between wages and employment in general is ambiguous, it is shown that product market integration works like a general improvement in productivity via the specialization it allows through trade. Unambiguously, real wages and employment and welfare improve upon reductions in trade frictions, and therefore workers are better off irrespective of whether the market power of unions is enhanced or muted. JEL Classification: F15, J30, J50 Keywords: trade frictions, wage formation, employment, welfare gain