2006–2010

Multinationals, Skills, and Wage Elasticities

Reprint No. 2010:20

Author(s): Katariina Nilsson Hakkala, Fredrik Heyman and Fredrik SjöholmYear: 2010 Title: Review of World Economics Volume (No.): 146 (2) Pages: 263–280
Online article (restrictions may apply)


The increase in foreign direct investments raises concerns about labor market consequences in many countries. It is feared that multinational firms are inclined to shift jobs abroad and increase job volatility. We use firm-level data to examine if multinationality and foreign ownership affect the wage elasticity of labor demand. Unlike previous studies, we distinguish the effect on different skill groups of employees. We find no general difference in wage elasticity between foreign and domestic firms but the wage elasticity is higher in multinational firms than in national firms, in particular for medium-skilled workers.


Reference:
Nilsson Hakkala, Katariina, Fredrik Heyman and Fredrik Sjöholm (2010), "Multinationals, Skills, and Wage Elasticities". Review of World Economics 146(2), 263–280.

Fredrik Heyman

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Ph: +46 8 665 4537
fredrik.heyman@ifn.se

Fredrik Sjöholm

Contact

Ph: +46 46 222 74 26
fredrik.sjoholm@nek.l...

Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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