Online Exports and the Wage Gap

38 Pages Posted: 11 Aug 2017 Last revised: 9 Nov 2017

See all articles by Marcio Cruz

Marcio Cruz

World Bank; Federal University of Parana (UFPR) - Departamento de Economia

Emmanuel Milet

University of Geneva

Marcelo Olarreaga

University of Geneva; Centre for Economic Policy Research (CEPR)

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Date Written: August 7, 2017

Abstract

The development of the Internet is often seen as a source of demand for skilled workers and therefore a potential driver of the wage gap between skilled and unskilled workers. This paper focuses on the impact that international trade in online platforms has on the wage gap. Because online trade allows smaller firms with relatively more unskilled workers to access world markets it can be expected a priori that an expansion of online exports reduces the wage gap. After correcting for potential endogeneity bias in a sample of 22 developing countries for which online trade and wage gap data can be matched, the study finds that a 1 percent increase in the share of online exports over GDP leads to a 0.01 percent decline in the wage gap.

Keywords: Labor Policies, Electronic Commerce, ICT Applications, E-Business, Rural Labor Markets, Labor Markets

Suggested Citation

Cruz, Marcio and Milet, Emmanuel and Olarreaga, Marcelo, Online Exports and the Wage Gap (August 7, 2017). World Bank Policy Research Working Paper No. 8160, Available at SSRN: https://ssrn.com/abstract=3016792

Marcio Cruz (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Federal University of Parana (UFPR) - Departamento de Economia ( email )

Av. Pref. Lothario Meissner, 632
Centro
Curitiba - PR, 80060-000
Brazil

Emmanuel Milet

University of Geneva ( email )

102 Bd Carl-Vogt
Genève, CH - 1205
Switzerland

Marcelo Olarreaga

University of Geneva ( email )

40 Boulevard du Pont-d'Arve
Genève, CH - 1205
Switzerland

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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