• Skip to primary navigation
  • Skip to content
  • Skip to primary sidebar

IZA Newsroom

IZA – Institute of Labor Economics

  • Home
  • Archive
  • Press Lounge
  • DE
  • EN
ResearchJuly 29, 2013

How globalization prevents wage increases

It is widely believed that certain types of workers suffer from globalization since firms’ international engagement might lead to lower job security and lower bargaining power in wage negotiations. In particular, low-skilled workers are seen as the losers of globalization in this respect. In a new IZA discussion paper, Andreas Lichter, Andreas Peichl and Sebastian Siegloch test this belief empirically by looking at the effects of firms’ exporting behavior on the workers’ potential to claim higher wages in Germany. In line with common belief, the authors show that the higher the exports of a firm, the higher the competition in the product market and the lower the scope for wage increases of the workforce. Yet, they do not find evidence that low-skilled workers are particularly negatively affected. The findings of the paper could also explain the stylized fact that workers employed in exporting firms generally receive higher wages than employees in non-exporting firms: Besides reflecting differences in firm productivity, the wage premium could also serve as a compensation for higher job insecurity of the workforce and lower upward mobility of wages.

Featured paper

IZA Discussion Paper No. 7494 Exporting and Labor Demand: Micro-Level Evidence from Germany Andreas Lichter, Andreas Peichl, Sebastian Siegloch

Share this article

Share on X Share on Facebook Share on LinkedIn Share via e-mail
  • export
  • Germany
  • globalization
  • job insecurity
  • labor demand
  • low-skilled workers
  • wage gap
  • Andreas Lichter
  • Andreas Peichl
  • Sebastian Siegloch
Previous Post
Shuffle
Next Post

Reader Interactions

Primary Sidebar

Recent Posts

  • June 4, 2025

    How workplaces shape the economic impact of caregiving shocks on mothers
  • June 2, 2025

    How administrative data fosters young economists’ careers
  • May 30, 2025

    Raising the glass raises risks for the whole family

Related Content

  • February 20, 2017

    On World Day of Social Justice: Insights on economic inequality from IZA World of Labor
  • November 10, 2015

    Interview with Michael Clemens on smart policy toward high-skill emigration
  • 
  • 
  • Archive
  • 
  • Research
  • 
  • How globalization prevents wage increases

© 2013–2025 Deutsche Post STIFTUNGImprint | Privacy PolicyIZA