Foreign Direct Investment, Wage Inequality and Skilled Labour Demand in EU Accession Countries

Falzoni, Anna M.; Bruno, Giovanni S. F.; Crinò, Rosario

doi:10.2139/ssrn.676652

Download This Paper

Open PDF in Browser

Add Paper to My Library

Foreign Direct Investment, Wage Inequality and Skilled Labour Demand in EU Accession Countries

Centro Studi Luca d'Agliano Development Studies Working Paper No. 188

34 Pages Posted: 16 Mar 2005

See all articles by Anna M. Falzoni

Giovanni S. F. Bruno

Bocconi University - Department of Economics

Rosario Crinò

University of Bergamo - Department of Economics

Date Written: October 2004

Abstract

During the 1990s Poland, Hungary and the Czech Republic have experienced rapid increases in wage inequality between skilled and unskilled workers and received the largest FDI inflow in Central and Eastern Europe. This paper analyzes whether FDI has contributed to the raise in earning inequality via a change in the skill composition of labor demand in the three countries. While we find that in Hungary and the Czech Republic FDI exerts a positive direct impact on the skill-premium, in none of the countries considered FDI has worsened wage inequality by favoring labor demand shifts.

Keywords: Foreign direct investment, Labour demand, Wage inequality

JEL Classification: F16, F23, J23, J31

Suggested Citation: Suggested Citation

Falzoni, Anna M. and Bruno, Giovanni S. F. and Crinò, Rosario, Foreign Direct Investment, Wage Inequality and Skilled Labour Demand in EU Accession Countries (October 2004). Centro Studi Luca d'Agliano Development Studies Working Paper No. 188, Available at SSRN: https://ssrn.com/abstract=676652 or http://dx.doi.org/10.2139/ssrn.676652