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The World Bank Economic Review Advance Access originally published online on June 6, 2009
The World Bank Economic Review 2009 23(2):269-294; doi:10.1093/wber/lhp004
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© The Author 2009. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org

Do Exporters Pay Higher Wages? Plant-level Evidence from an Export Refund Policy in Chile

Ivan T. Kandilov

Ivan T. Kandilov is an assistant professor of agricultural and resource economics at North Carolina State University.

Correspondence: his email address is ivan_kandilov{at}ncsu.edu

JEL codes: O15, F16, J30, F14

The impact of increased export activity on plant wages is estimated in a developing country context. To avoid potential endogenous selection problems, the empirical analysis benefits from exogenous variation in exports induced by a policy experiment—an export subsidy system implemented in Chile in 1986. Analyses using data from a panel survey of Chilean manufacturing establishments show that while the export subsidy had only a modest positive impact on the industrywide relative high-skilled wage, it significantly increased the plant-level relative high-skilled wage in medium-size establishments, which are most likely to take advantage of the subsidy and enter the export market.


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