The Multinational Wage Premium and Wage Dynamics

32 Pages Posted: 9 Apr 2015

See all articles by Gianluca Orefice

Gianluca Orefice

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Nicholas Sly

University of Oregon - Department of Economics

Farid Toubal

Ecole Normale Superieure de Cachan (ENS) - Departement of Economics ans Management; National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Date Written: March 31, 2015

Abstract

Using detailed administrative data linking French firms and workers over the years 2002-2007, we document a distinct U-shaped pattern in worker-level wages surrounding the time their employer is acquired by a foreign firm, with a dip in earnings observed for several years before domestic firms switch to MNE status. This pre-acquisition decline in earnings can partly explain why prior evidence found no impact of foreign ownership on worker-level wages. Accounting for the pre-acquisition earnings dip and other confounding wage dynamics we find that MNEs increase remuneration to workers by 4.8% initially, and by 6%-8% after several years. Unique information about in-kind payments reveals that bonuses and other non-monetary remuneration also exhibit a U-shaped pattern surrounding foreign acquisition.

Keywords: multinational enterprises, wage premium, in-kind payments

JEL Classification: F660, F140, F230

Suggested Citation

Orefice, Gianluca and Sly, Nicholas and Toubal, Farid, The Multinational Wage Premium and Wage Dynamics (March 31, 2015). CESifo Working Paper Series No. 5263, Available at SSRN: https://ssrn.com/abstract=2592305

Gianluca Orefice

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

Nicholas Sly (Contact Author)

University of Oregon - Department of Economics ( email )

Eugene, OR 97403
United States

Farid Toubal

Ecole Normale Superieure de Cachan (ENS) - Departement of Economics ans Management ( email )

France

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
43
Abstract Views
310
PlumX Metrics