Paying More to Hire the Best? Foreign Firms, Wages, and Worker Mobility
Pedro S. Martins
Queen Mary College - School of Business and Management; CEG - IST; Institute for the Study of Labor (IZA)
March 17, 2011
Economic Inquiry, Vol. 49, No. 2, pp. 349-363, 2011
In the context of the debate on the labor-market consequences of globalization, we adopt an original approach toward the identification of the wage differences between foreign and domestic firms: worker mobility. Using matched employer-employee panel data for Portugal, we consider virtually all spells of interfirm mobility over a period of 10 yr. We find that foreign firms offer significantly more generous wage policies, although there is also a (smaller) selection effect. The results are robust to the consideration of displaced workers, wage growth differences in the new firms, and different subsets of workers.
Number of Pages in PDF File: 15
JEL Classification: J31, J63, F23Accepted Paper Series
Date posted: March 21, 2011
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