Sharing of intermediate inputs, skills and wage premium: a multilevel analysis applied to the Manaus Free Trade Zone

Abstract

The study investigates how the sharing of intermediate goods and the composition of the local labor market influenced the nominal wages of workers linked to firms installed in the Manaus Free Trade Zone (ZFM) in 2015. The qualification of occupations is defined by scores of skills involving cognitive, social and motor competence; while sharing of intermediate goods configure intersectoral connections extracted from the Input-Output Matrix calculated for the state of Amazonas, base year 2015. After controlling for individual worker characteristics, estimates obtained via the multilevel model revealed that the wage premium is strongly determined by matching skills-local productive structure. Furthermore, the returns are more significant when cognitive abilities are subject to an interactive process involving exchanges of intermediate goods in the local market.