International Trade and Collective Bargaining Outcomes: Evidence from German Employer-Employee Data

In theoretical trade models with variable markups and collective wage bargaining, export exposure may reduce the exporter wage premium. We test this prediction using linked German employer-employee data from 1996 to 2007. To separate the rent-sharing mechanism from assortative matching, we exploit individual worker information to construct profitability measures that are free of skill composition. We find that rentsharing is less pronounced in more export intensive firms or in more open industries. The exporter wage premium is highest for low productivity firms. In line with theory, these findings are unique to the subsample of plants covered by collective bargaining.