Exporting and Labor Demand: Micro-level Evidence from Germany

It is widely believed that globalization a ffects the extent of employment and wage responses to economic shocks. To provide evidence for this, we analyze the e ffect of firms' exporting behavior on the elasticity of labor demand. Using rich, German administrative linked employer-employee panel data from 1996 to 2008, we explicitly control for self-selection into exporting and endogeneity concerns. In line with our theoretical model, we find that exporting at both the intensive and extensive margins signi cantly increases the (absolute value of the) unconditional own-wage labor demand elasticity. This is not only true for the average worker, but also for diff erent skill groups. For the median fi rm, the elasticity is three-quarters higher when comparing exporting to nonexporting fi rms.

Lichter, Andreas, Andreas Peichl and Sebastian Siegloch (2014), Exporting and Labor Demand: Micro-level Evidence from Germany, IZA Discussion Papers.