Firms’ exports, volatility and skills: Evidence from France

This paper studies the effects of globalization on the employment growth volatility by investigating the relationship between firms’ export intensity and labor demand volatility across skills. Based on detailed firm-level administrative French data for the period 1996–2007, we show that firms with intense export activity exhibit lower volatility of labor demand for skilled, compared to unskilled workers. Both the theoretical and empirical analysis point to the importance of skill-intensive fixed export costs in explaining this effect. Our identification strategy is based on an instrumental variable approach to provide evidence of causal effects. Our findings show that a higher level of export intensity increases the employment growth volatility for unskilled relative to skilled workers.