Exporting, Importing and Wages in Africa: Evidence from matched employer-employee data

Organization(s): ILO
Author: Christian Viegelahn, Marta Duda-Nyczak
Regions: Sub-Saharan Africa
Year: 2018
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This paper studies wages in exporting and importing firms of the manufacturing sector in Africa, using firm-level data and employer-employee-level data from the World Bank Enterprise Surveys. We find that exporters pay on average higher wages to their workers than non-exporters. Gains from economies of scale explain the positive wage premium of exporters, rather than differences in skill utilization, the employment of certain types of workers, or technology transfers. In contrast, there is no evidence for a positive firm-level wage premium of importing, at least after controlling for firm age, and the wage premium of importing at the employee-level is estimated to be negative. The paper also finds indirect evidence for a weaker bargaining power of workers employed by importers. These results fit into the African context, where the comparative advantage of firms in export markets is mainly based on low costs than on quality, and where firms import predominantly out of necessity than out of choice. Finally, the paper provides evidence that a gender wage gap is absent within trading firms, while we find evidence for a gender wage gap in non-trading firms.
Social Protection and Human Rights