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- Wage Benefit Found in Export-Intensive Services Industries
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Wage Benefit Found in Export-Intensive Services Industries
U.S. exports of services accounted for $527.8 billion in 2008, and brought a vareity of tangible benefits to the U.S. economy (photo © David Jones/iStock)
A new report by the International Trade Administration analyzed the weekly earnings of nearly 500,000 U.S. workers and found a significant wage premium for employees of export-intensive industries in the services sector.
Workers in export-intensive services industries earn 15 to 20 percent more than comparable workers in other services industries, according to a study recently published by the Office of Competition and Economic Analysis of the International Trade Administration (ITA).
The paper, “Weekly Earnings in Export-Intensive U.S. Services Industries” by David Riker and Brandon Thurner, ITA staff economists, calculates the premium in wages using worker-level data on weekly earnings, educational attainment, occupational categories, and other demographic characteristics from the Current Population Survey and industry-level data on U.S. exports of services from the Bureau of Economic Analysis.
For More Information
The papers discussed in this article are part of an ongoing series of economic studies—Manufacturing and Services Economics Briefs—that are published by ITA’s Office of Competition and Economic Analysis. They are available on ITA’s publications website.
Large and Growing Trade
There is a common misperception that services are essentially nontraded. In fact, many U.S. services industries have measurable exports, and their volumes are large and growing. U.S. exports of private services accounted for $410.8 billion in 2006, $478.1 billion in 2007, and $527.8 billion in 2008.
The export earnings premium in the U.S. services sector has been stable during the past decade despite the substantial expansion of U.S. services exports. This stability suggests that further expansion of U.S. services exports will not only increase jobs but also increase relatively high-paying jobs.
Previous Findings Confirmed
The report confirmed that the earnings premium of 15 to 20 percent matches the export earnings premium for the tradable services industry estimated by academic researchers. It is similar to the export earnings premium (18 percent) estimated for the manufacturing sector and was the subject of another paper by the same authors, “Do Jobs in Export Industries Still Pay More? And Why?”
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