fdi and income inequality evidence from a panel of u s states this study employs state level panel data to explore the relationship between inward foreign direct investment fdi and income inequality in the united states using panel cointegration techniques that allow for cross sectional heterogeneity cross sectional dependence and endogenous regressors we find that the short run effects of fdi on income inequality are insignificant or weakly significant and negative in the long run however fdi exerts a significant and robust negative effect on income inequality in the united states this result for the united states as a whole does not imply that fdi narrows income gaps in the long run in each individual state there is considerable heterogeneity in the long run effects of fdi on income inequality across states with some states 21 out of 48 cases exhibiting a positive relationship between fdi in income inequality

foreign wage premium gender and education insights from vietnam household surveys this paper investigates the differential impacts of foreign ownership on wages for different types of workers in terms of educational background and gender in vietnam using the vietnam household living standards surveys of 2002 and 2004 whereas most previous studies have compared wage levels between foreign and domestic sectors using firm level data thus excluding the informal sector one advantage of using the living standards surveys in this paper is that the data allow wage comparison analyses to extend to the informal wage sector a series of mincerian earnings equations and worker specific fixed effects models are estimated several findings emerge first foreign firms pay higher wages relative to their domestic counterparts after controlling for workers personal characteristics second the higher the individual workers levels of education the larger on average are the wage premiums for those who work for foreign firms third longer hours of work in foreign firm jobs relative to working in the informal wage sector are an important component of the wage premium finally unskilled women experience a larger foreign wage premium than unskilled men reflecting the low earning opportunities for women and a higher gender gap in the informal wage sector

monitoring and pay the shirking model of efficiency wages has been thought to imply that monitoring and pay are substitute instruments for motivating workers we demonstrate that this result is not generally true as monitoring becomes cheaper a given effort level will be implemented with more monitoring and less pay but it is typically also optimal to implement a higher effort the article provides conditions under which the latter scale effect dominates the former substitution effect and vice versa if the ease of monitoring varies across occupations the model predicts a nonmonotonic relationship between the wage level and workers rents

economic measurement progress and challenges the national income accounts together with the source data which they use form the core of our economic measurement system the development of the concepts and measurements of national income are among the most important achievements of modern economics replacing the older notions of national wealth of the physiocrats and mercantilists for example is national income and product confined to market activity the appropriate fundamental concept yes but we ask a lot of national income and product accounting it is used most importantly to gauge economic progress how much better off are we than our parents or grandparents is the economy growing adequately slowly or rapidly in recent years and are we at a cyclical turning point the information requirements of course will differ depending on the question gaps in inventory measurement may be an appropriate resource claimant to those interested in cyclical issues whereas finding identifying and incorporating new products and quality change more rapidly may be far more significant to long term economic growth we also tend to have a survivor selection bias in our concern with the speed with which new ideas and concepts are incorporated into the national accounts and other data series superlative indexes hedonic regression methods for quality change and many others were much more obvious after some years of diffusion throughout the profession than at their inculcation as a result the gap between major suggested improvements and their adoption by statistical agencies can be extensive often decades erwin diewert 1999 should national accounts be extended to nonmarket activity nonmarket work time is perhaps the most important area for supplemental information natural resources and the environment are close behind william d nordhaus and edward kokkenlenberg 1999 r d capital environmental capital human capital and other intangibles are high priority items but should be dealt with in the form of satellite accounting so i applaud the bea s recent initiatives in this direction i come to this conclusion for a variety of reasons not to suggest that technological capital and human capital are less important than tangible capital in fact perhaps quite the opposite they are all complementary boskin and lawrence lau 2000 but the issues in definition classification and measurements are still more problematic for these items than for traditional items and therefore i believe they should not be added directly to the national income and product accounts nipa in short my own view is that substantial improvements can and should be made in the traditional domain of the national accounts improvements in the core national accounts should not be sacrificed to a proliferation of satellite accounts in principle we should do both and sufficient resources should be provided to accomplish these tasks

nonverifiability noncontractibility and ownership determination models in foreign direct investment with an application to foreign operations in japan abstract firms intangible assets are important inputs for their foreign operations inputs of intangible assets and the resulting output are often not contractible in that neither precise use of such inputs nor potential products which can be produced by taking advantage of such inputs can be completely delineated in a contract where such incomplete contracts prevail control of residual rights becomes essential for protecting firms intangible assets ownership is often used to control residual rights in international operations in this paper we present a few interrelated models of ownership determination for firms international operations we show that a firm s ownership share in its foreign operation reflects the importance of the firm s intangible assets used in the operation and the resulting bargaining power relative to its local partners we test our theoretical implications using data on foreign firms manufacturing operations located in japan our empirical results are consistent with theoretical predictions

the impact of international outsourcing on unionization and wages evidence from the apparel export sector in central america it is often assumed that manufacturing workers in developing countries as recipients of outsourced jobs would achieve economic benefits and organizational power the author argues that job growth in developing countries through outsourcing to competing firms has often actually resulted in declining unionization and lower wage rates relative to traditional integrated manufacturing firms using time series data on union membership from 1980 2003 for honduras and el salvador as well as 2004 household survey data for el salvador he examines the determinants of unionization rates and wages in the manufacturing sectors he finds that that competitive outsourcing hurts labor at the plant level in three ways 1 it reduces labor s strike leverage by geographically dispersing the production process 2 it increases the threat of plant mobility by decreasing plant level investments and 3 it increases labor costs relative to total costs which creates an incentive for employers to keep wages low and unions out

why are small firms different managers views do incentives differ between large and small organizations results from a representative survey of compensation managers are used to shed light on the issues i find that i small establishments rely less on pecuniary incentives and have a significantly more hostile attitude towards incentive schemes based on competition and relative rewards ii large units are more vulnerable to mechanisms of efficiency wages effects that remain even after controlling for differences in monitoring ability iii large units are more prone to indicate that negative reciprocity is important and that their employees care about relative pay i argue that these findings fit with behavioral stories of incentives and motivation in particular those stressing group interaction effects inequity aversion and gift exchange

the impact of land use planning and tax subsidies on the supply and price of housing in britain this article presents new empirical estimates of the impact of two types of policy intervention tax subsidies and land use planning on the housing market in britain the estimates are derived from a set of models representing the demand and supply sides of the market for the new private housebuilding which include an explicit land supply element the models are fitted to cross sectional data at the inter urban local authority level and then employed in medium period simulations of alternative policies modelling at this level enables estimates to be made of the extent of variation between local markets in the elasticity of supply and also in the impacts of policy measures including the capitalisation of tax subsidies

firm size wage gaps job responsibility and hierarchical matching i present the fact that wage gaps due to firm size increase with job responsibility i use swedish data to determine whether wage gaps increase with a direct measure of job responsibility to compare the age patterns of the wage gaps for blue and white collar workers and to compare wages by job responsibility and spans of control with u s data i compare supervisory to nonsupervisory occupations and find that wage gaps increase with job responsibility for most occupational ladders this fact is consistent with hierarchical matching models in which the larger number of subordinates amplifies managerial talent

foreign direct investment and wage inequality evidence from china summary this study provides micro level evidence on the close link between foreign participation and wage inequality we investigate the wage premium and the wage spillover effect of foreign invested enterprises in the chinese manufacturing sector the results indicate a significant foreign premium in both wage and non wage compensation the presence of foreign and hong kong macao and taiwan hmt investment results in a significantly negative spillover in terms the wage level in domestic firms and discourages wage growth in such firms overall the evidence suggests that exposure to foreign investment increases inter enterprise wage inequality

wages profits and capital intensity evidence from matched worker firm data swedish data on workers matched with firms balance sheet reports are used to examine the relation between wages and firms ability to pay results indicate that experienced and highly educated workers are sorted into profitable firms wages are positively correlated with profits and the capital labor ratio after controlling for worker quality degree of effort supervision job characteristics local unemployment firms employment history and employer size lester s range of pay due to rent sharing is around 12 24 of the mean wage in sweden which is close to the estimates for the united states and united kingdom

the distribution of london residential property prices and the role of spatial lock in much of mainstream economic analysis assumes that markets adjust smoothly through prices to changes in economic conditions however this is not necessarily the case for local housing markets wh

wages and labor management in african manufacturing using matched employer employee data on 10 african countries this paper examines the relationship beween wages worker supervision and labor productivity in manufacturing wages increase with rm size for both production workers and supervisors we develop a two tier model of supervision that can account for this stylized fact and we t the structural model to the data employee data is used to derive a rm speci c wage premium that is purged of the effect of worker observables we nd as trong effect of both supervision and wages on effort and hence on labor productivity labor management in sub saharan africa appears problematic with much higher supervisor to worker ratios than in morocco and a higher elasticity of effort with respect to supervision

foreign owned firms around the world a comparative analysis of wages and employment at the micro level abstract this paper provides the first microeconomic cross country analysis of the effects of foreign ownership on wages employment and worker turnover rates using firm level and linked worker firm data we apply a standardised methodology for three developed germany portugal uk and two emerging economies brazil indonesia we find that wage effects are larger in developing countries and that for each country the largest effect on wages comes from workers who move from domestic to foreign firms employment growth after foreign takeover is concentrated in high skill jobs in contrast to widespread fears there is no evidence that wage gains come at the expense of greater job insecurity separation rates actually fall slightly after takeover we conclude that the positive effect of foreign ownership on wages is not primarily driven by its impact on incumbent wages but by its impact on the creation of high wage jobs

on the determinants of multinationals ownership preferences evidence from greece and portugal abstract the aim of the paper is to examine the determinants of the ownership preferences of manufacturing multinational firms established in greece and portugal in the 1990s differences between the two countries in terms of relative fdi size industry and ownership choices are observed transaction cost arguments together with bargaining power considerations through their effects on the affiliate s expected profits provide the theoretical basis for the econometric model which uses multinomial logit analysis on greek and portuguese data the estimations contribute to a better understanding of observed differences showing that firm and industry characteristics interacting with location affect ownership decisions

on the differential behaviour of national and multinational firms a within and across sectors approach this paper looks for different patterns of behaviour of national firms and multinational enterprises mnes its main contribution is the use of a computable general equilibrium perspective to analyse firms performance the model is calibrated for the case of the czech republic which has been a very attractive foreign direct investment location in the last three decades we replicate the arrival of mnes to different sectors of this country in turn and analyse the responses of both types of firms across the 20 different sectors in which the czech economy has been split our results grasp the short run impact the higher labour intensity of national firms leads them to different patterns of production and labour demand compared with mnes operating within the same sector the demand side of the model particularly exports and private consumption drives the evolution of production and labour demand across sectors regarding prices we also find a differential pattern between both types of firms within and across sectors our analysis offers detailed evidence on how the impact of mnes will differ depending on the sector to which they arrive finally the aggregate results suggest that a completely different microeconomic panorama may underlie rather similar macroeconomic outcomes

urban decline and durable housing urban decline is not the mirror image of growth and durable housing is the primary reason the nature of decline is so different this paper presents a model of urban decline with durable housing and verifies these implications of the model 1 city growth rates are skewed so that cities grow more quickly than they decline 2 urban decline is highly persistent 3 positive shocks increase population more than they increase housing prices 4 negative shocks decrease housing prices more than they decrease population 5 if housing prices are below construction costs then the city declines and 6 the combination of cheap housing and weak labor demand attracts individuals with low levels of human capital to declining cities

use of minority and 50 50 joint ventures by united states multinationals during the 1970s the interaction of host country policies corporate strategies this article examines geographical sectoral and corporate trends in the use of minority and 50 50 joint ventures by u s multinational manufacturing and mining firms in less developed countries ldcs during the 1970s it is based primarily on data found in the harvard multinational enterprise data base as updated through the mid 1970s and supplemented with corporate performance data for the 1975 1980 period from a new international competitive analysis ica database developed with support from the general electric foundation

wage dispersion and productive efficiency evidence for sweden the swedish record of enormous compression of relative wages under centralized solidarity bargaining followed by substantial decompression of wages after central bargaining broke down supplies observations well suited to empirical evaluation of arguments about the response of productive efficiency to shifts in wage distribution we obtain no results supporting fairness morale and cohesiveness theories implying that wage leveling within workplaces and industries may enhance productivity reduction of interindustry wage differentials evidently did however contribute positively to aggregate output and productivity growth most likely for the structural reasons first emphasized by swedish trade union economists almost a half century ago

is inflation persistence different in reality this study examines the inflation persistence using both online and official price indexes in argentina brazil china japan germany south africa the uk and the us using fractional integration technique the main results suggest that the degree of persistence estimated by the long memory parameter is smaller when using online price indexes believed to be a more realistic measure of inflation mainly in the cases of argentina brazil china and the uk monetary policy implications are discussed

wage compression within the firm evidence from an indexation scheme we revisit the role of labour market institutions by showing how they affect the sharing of firm specific rents between employers and employees we look at an italian wage indexation mechanism scala mobile that compressed the distribution of wages imposing real wage increases at the bottom of the distribution after developing a simplified version of a search model with intra firm bargaining and on the job search we document that skilled workers received lower wage adjustments when employed at firms with many unskilled workers and they tended to move towards more skill intensive firms moreover the system drove the least skill intensive firms out of the market

geographical location of foreign direct investment and wage inequality in china this paper examines the relationships between distance and the transportation costs of international trade on the location specific effects of foreign direct invest ment and provincial per capita income in china applying the economic geography model proposed by redding and venables 2004 it traces the increasing wage inequality among the coastal and inland provinces by focusing on the distance of foreign owned firms from access to international markets and to suppliers of intermediate inputs first a gravity type equation is used to construct the market access and supplier access variables then the effect of market and supplier access on provincial wage rates is estimated the results indicate that distance does affect international trade and geography explains roughly one third of the wage differential greater market access increases the provincial wage gap while larger supplier access increases the wage difference in trade destined for the foreign market but decreases the wage difference in trade targeted for the domestic market similar findings also result from applying the estimations to two local firm types state owned enterprises and collective owned enterprises

corporate tax effects on the quality and quantity of fdi this paper measures the relative importance of quality and quantity effects of corporate taxation on foreign direct investment quantity is affected if corporate taxes reduce the equilibrium stock of foreign capital in a given country quality effects arise if taxes decrease the extent to which investment contributes to the corporate tax base and the capital intensity of production depending on the sign of the quality effects the detrimental welfare effects of corporate taxation are either mitigated or aggravated we derive a number of hypotheses how corporate tax changes may affect the quality of investment our hypotheses are then tested using data from a large sample of european multinationals with regard to corporate tax effects on the corporate tax base we find that quality effects account for up to fourty per cent of the total effect with regard to corporate tax effects on labour income our results suggest that quality effects mitigate the negative quantity effect by nearly sixty percent as corporate taxes strongly increase the labor intensity of production an important implication is that governments should not exclusively care about the size of inbound fdi flows but also about their specific characteristics i e their quality

capitalising the value of free schools the impact of supply characteristics and uncertainty there has been a growing literature in both the us for example haurin and brasington 1996 and black 1999 and the uk for example gibbons machin 2003 that estimates the way in which school quality is capitalised into house prices cheshire and sheppard 1995 and 1999 estimated hedonic models in which the quality of the secondary school to which a household was assigned was a significant variable which provided evidence that secondary school quality was being capitalised into the price of houses in contrast gibbons and machin concluded that primary schools were more significant each of these analyses is predicated on the assumption that the value of local schools should be reflected in the value of houses we argue here that this is rather too simple we should expect variation in the capitalised price of a given school quality at either primary or secondary level according to the elasticity of supply of school quality in the local market the certainty with which that quality can be expected to be maintained over time and the suitability of the dwelling to accommodate children these factors will vary systematically between and perhaps within cities this paper explores the sources and the impact of such variations as well as the impact of model specification the results provide new evidence on the complex and subtle ways in which housing markets capitalise the value of local public goods such as school quality and perhaps most importantly suggest that this is highly non linear houses in the catchment areas of only the best state schools command substantial premiums but such capitalised values can be very substantial indeed

the economics of joint ventures in less developed countries the paper examines the microeconomic partial equilibrium behavior of joint ventures established between transnational corporations and domestic partners in less developed countries it focuses on issues relating to resource allocation and profit distribution under various institutional scenarios the analysis places special emphasis on the role of bargaining power transfer pricing stock ownership and profit shares of the parties and the responsiveness of joint ventures to national development goals some of the results apply to wholly owned subsidiaries of transnational corporations local firms and licensing arrangements which emerge as special cases

the effect of foreign direct investment on the urban wage in china an empirical examination how does foreign direct investment fdi affect the wage levels of cities in a host country this paper uses a panel dataset of chinese cities to examine the impact of inward fdi on the urban real wage the results suggest that the existence of fdi has a significant and positive effect on urban real wages and that this impact remains significant after controlling for other city characteristics cross city variation of fdi intensity is one important factor contributing to intercity wage inequality

land use planning and the housing market a comparative review of the uk and the usa this paper provides a review of some of the key articles and research examining the relationship between planning regulation and its impact on the housing market in the uk and the us in both count

paying more to hire the best foreign firms wages and worker mobility i introduction as globalization evolves there is greater interest in its labor market implications one dimension of this question concerns the role of foreign firms in terms of their remuneration of host economy workers while earlier cross sectional evidence suggests that foreign firms offer more generous pay levels than their domestic counterparts aitken et al 1996 feenstra and hanson 1997 some of these results have been questioned in recent research based on longitudinal worker level data martins 2004 heyman et al 2007 andrews et al 2007 moreover firm level studies based on foreign acquisitions of domestic firms find mixed results 1 the main problem in research about the foreign ownership wage differential concerns unobserved heterogeneity across workers employed in either domestic or foreign firms if firm affiliation is correlated with other factors that may affect wages but that are not controlled for then estimates will be biased while some research that aims to tackle this issue considers the case of acquisitions when the same workers can be observed under the two types of firms here we approach the unobserved heterogeneity challenge from an original perspective worker mobility specifically we draw upon a longitudinal census of the portuguese labor market in order to consider virtually all spells of interfirm worker mobility over a long period of time 1991 2000 such mobility spells allow us to observe the same workers when employed by domestic and foreign firms in order to disentangle the wage policy of the firm from the heterogeneity of the workforce we also consider selection effects namely the unexplained differences in the wages of workers who are to experience a movement to a different firm before such movement occurs these unexplained wage differences are likely to capture additional skills not measured in the data but that are observable by those workers current employers such as ability motivation etc on the other hand the wage policy effect which is more directly related to the goal of this paper concerns differences in remuneration experienced by workers who engage in interfirm mobility as they move between firms such differences in remuneration practices across firms are predicted by noncompetitive models of the labor market namely efficiency wages and search models moreover the scope for such wage policy differences is also supported by abundant empirical evidence including that of rent sharing discrimination cohort effects and other evidence of firm heterogeneity in general abowd et al 1999 bartelsman and doms 2000 as far as we know our paper is the first to conduct a systematic analysis of interfirm worker mobility drawing on census data these population data are particularly important for our purpose as the analysis of even large samples would dramatically diminish one s ability to follow workers over time furthermore we are the first to conduct such an extensive analysis in the context of the foreign ownership wage differential literature 2 finally our results may also be useful in terms of reconciling some contrasting evidence for different countries and in terms of shedding light on the role of worker mobility as a channel of productivity spillovers from foreign to domestic firms fosfuri et al 2001 javorcik 2004 unlike earlier research based on foreign acquisitions our paper finds very strong evidence of a sizeable positive wage policy effect for foreign firms however selection effects are also present but at a much smaller scale these results are robust to a number of checks including the consideration of the case of displaced workers and an analysis of the wage growth patterns of movers when in hiring firms the structure of the paper is as follows section ii describes the data sections iii and iv present the results and the robustness analysis finally section v concludes

native migrant labour substitution by industry and wage effects evidence from the uk unlike previous studies we estimate the native migrant substitution elasticity nme differentiated by sector to do so we employ a straightforward estimation strategy that consists of adding slo

wages and foreign ownership a comparative study of mexico venezuela and the united states abstract this paper explores the relationship between wages and foreign investment in mexico venezuela and the united states despite very different economic conditions and levels of development we find one fact that is robust across all three countries higher levels of foreign investment are associated with higher wages however in mexico and venezuela foreign investment is associated with higher wages only for foreign owned firms there is no evidence of wage spillovers leading to higher wages for domestic firms the lack of spillovers in mexico and venezuela is consistent with significant wage differentials between foreign and domestic enterprises in the united states where the evidence suggests some wage spillovers from foreign to domestic enterprises wage differentials are smaller

rent sharing holdup and wages evidence from matched panel data rent sharing by workers can reduce the incentives for investment if some of the returns to sunk capital are captured in higher wages we propose a simple measure of this holdup effect based on the size of the wage offset for firm specific capital accumulation using social security earnings records for workers in the veneto region of italy linked to detailed financial data for their employers we find strong evidence of rent sharing with an elasticity of wages with respect to potential rents per worker of around 4 arising mainly at larger firms with higher price cost margins on the other hand we find little evidence that bargaining lowers the return on investment instead firm level bargaining appears to split the rents after deducting the full cost of capital

pay inequality and firm performance evidence from matched employer employee data a large matched employer employee data set for sweden is used to test several predictions from tournament theory for white collar workers a positive and significant effect of intra firm wage dispersion on profits and average pay is found using various measures of wage dispersion this result is robust for controlling for firm differences in human capital and firm fixed effects as well as for instrumenting the wage dispersion variable to take into account endogeneity of wage dispersion using data on around 10 000 managers a positive and significant association between pay dispersion and profits is also found for executives further results include a positive relationship between market demand volatility and wage dispersion measured as coefficient of variation in managerial pay and a negative effect of the number of managers contestants on managerial pay spread the first two results are in accordance with predictions from tournament theory while the last one is not

the effect of foreign acquisition on employment and wages evidence from finnish establishments employee characteristics by skill groups makes it possible to disentangle the effect of foreign ownership on wages from its effects on the quality of the workforce furthermore this information allows us to examine the heterogeneity of the effect of foreign acquisition on wages and employment third the long timespan of our data thirteen years enables us to consider the effects of foreign acquisition in the long run hiring and firing costs may delay the effects of foreign acquisition by looking at the effects of acquisition in several periods after it has taken place these delays can be taken into account we believe finland to be an interesting case study for the effects of foreign ownership it is a typical example of a small open economy where foreign investment plays an important role furthermore our data cover the years 1988 2001 when the share of foreign direct investments rose rapidly in finland this increase is depicted in figure 1 and it partly reflects the worldwide trend in foreign direct investment but the years 1988 2001 were also characterized by two phenomena which undoubtedly led to the increase in the share of foreign owned firms first finland experienced a very severe recession in the early 1990s and the recovery from this crisis was associated with a rapid restructuring of the economy and a growth of new industries in particular the export oriented high tech sector 2 second finland joined the european union in 1995 which naturally removed a considerable number of barriers to foreign investment in the finnish economy the results derived by both matching and regression methods indicate that foreign acquisition has a positive effect on wages in all skill groups this wage increase is not immediate but occurs within one to three years after the acquisition the magnitude of this effect increases with the level of schooling of the workers the results indicate that there is a small decrease in the share of highly educated workers after foreign acquisition the decrease in the share of highly educated workers after acquisition also seems to hold for domestic acquisitions the paper is organized as follows the next section briefly describes the theoretical background for the analysis and reviews some previous empirical findings the third section describes the statistical framework and the fourth section presents the data sets the results are provided in the fifth section the last section concludes the paper

how robust is the microeconomic theory of the trade union this article argues that the predictions of standard trade union models and the tests for distinguishing between these models are not robust to quite small and reasonable changes in the conventional assumptions in particular it considers the effect of assuming that the ex post substitutability between labor and capital is less than the ex ante substitutability the paper shows that much of the conventional wisdom about the effects of trade unions is not necessarily true in this framework

wage and competition channels of foreign direct investment and new firm entry using a rich data set of the dutch manufacturing sector between 1995 and 2010 we investigate the effect of foreign direct investment fdi on domestic new firm entry the emerging empirical literature has focused on the direct relationship between fdi and entry but has not explored the mechanisms behind the observed effect drawing on a simultaneous equations model our analysis features both the direct effect of fdi as well as indirect effects through two channels industry competition and wages we estimate the parameters through 3sls and take into account the endogeneity of competition and wages with respect to entry our results show that there is a significant negative direct effect of fdi on entry at the same time fdi decreases competition and increases wage levels which then impact entry positively and negatively respectively the total effect of fdi is negative but small and virtually disappears after one year policy implications are discussed

unraveling the mne wage premium whereas ib has extensively studied mnes generic positive impact on host economies but rarely on employee wages economics research has only shown an overall mne wage premium we unravel this premium considering multiple levels of analysis and accounting for host country contextual contingencies to unveil mnes different positive or negative distributional effects using unique micro level data from over 40 000 employees in 13 countries we examine mnes distributional effects for employees gender experience and immigrant status the influence of host country property rights protection and labor regulation and interplays with region and industry effects mnes distributional effects show marked differences that largely depend on the host country context and that are positive for experienced and foreign born employees in developed countries but negative for females working in developing countries whereas in developed countries the gender wage gap is smaller in mnes than in domestic firms as hypothesized we find evidence of a larger wage gap in developing countries the analysis also reveals that the higher host countries level of property rights protection the lower the mne wage premium our study points at the need to reassess statements about the generic positive impact of mnes in host countries particularly in developing countries and discusses further research implications

planning and housing supply in two speed britain modelling local market outcomes summary economic research on uk housing markets has only recently got to grips with measuring and modelling the impact of planning and other public interventions although their importance has long been recognised in theory the interurban panel dataset utilised in this study does represent a step forward by permitting more robust econometric estimation and by incorporating a wider more balanced range of determinant factors a coherent set of relationships governing the key market outcomes house prices new building migration and vacancies can be established the modelling framework is used to explore differences in behavioural responses between markets in high and low demand states simulations are used to track the impact on market outcomes of different policy strategies applied in different types of locality supply measures needed to achieve national targets for house price growth reduction are assessed measures acting on both demand side and supply side variables in areas of high and low demand are compared these suggest that output is more sensitive than price to policies and that quite strong concerted policies would be needed to impact significantly on the major market imbalances currently seen

rent sharing and wages evidence from company and establishment panels a central question in labor economics and macroeconomics is whether the textbook competitive model provides an adequate representation of the labor market using longitudinal data on companies and establishments this article suggests that it may not as predicted by rent sharing models of the labor market changes in profitability are shown to feed through into long run changes in wages these are not temporary wage effects and are not driven by the unionized workplaces in the data the article s estimates imply that for rent sharing reasons alone lester s range of wages is approximately 16

real wage determination and rent sharing in collective bargaining agreements the microeconomic forces that influence real wages are not fully understood this paper studies pay determination using data on approximately 600 labour contracts it finds that the real wage is an increasing function of past profitability in the employer s industry and a decreasing function of the level of unemployment in the employer s region these results are consistent with rent sharing theories

the impact of foreign direct investment on new firm survival in the uk evidence for static versus dynamic industries the paper examines the impact of foreign direct investment fdi on the survival of business start ups fdi has potential for both negative displacement competition effects as well as positive knowledge spillover and linkage effects on new ventures we find a net positive effect for the whole dataset however a major contribution of the paper is to outline and test an argument that this effect is likely to be comprised of a net negative effect in dynamic industries high churn firm entry plus exit relative to the stock of firms alongside a net positive effect in static low churn industries we find evidence to support this view the results identify new effects of globalisation on enterprise development with associated challenges for industrial policy

microdata evidence on rent sharing we examine the effect of firm profits on wages for individual workers while focusing on the empirical complications associated with estimating the extent of rent sharing controlling for worker and firm fixed effects and using several instruments to deal with the endogeneity of profits we report results indicating that ordinary least square ols estimates strongly underestimate the effects of profits on wages moreover the effect of profits on wages are estimated separately for firms with increasing and decreasing profits within a given time period we find a positive and stable effect only in firms with increasing profits this is in line with the idea that falling profits do not lead to wage cuts while increasing profits imply higher wages

the effects of circular economy on economic growth a quasi natural experiment in china abstract this study aims to assess the impact of circular economy on economic growth in the process of rapid economic growth china has been facing with the pressure of insufficient supply of resources and environmental pollution which makes the development model of circular economy ce an imperative transformation china has carried out two batches of ce pilot cities to promote the construction of ecological economy and change the traditional economic development model which is employed as a quasi natural experiment in this study the effect of this ce policy on the local economic growth is explored using the propensity score matching psm method and difference in differences did model and a panel data of 163 chinese cities from the year of 2001 2012 has been used the results show that the growth rate of gdp of the pilot cities decreases significantly but the economic decline gradually recovers as time goes on in addition this study further conducts the regional heterogeneity analysis to compare the economic growth of ce pilot cities in three economic zones i e eastern central and western economic zones and the sectoral heterogeneity analysis to compare the economic growth of three main industries i e primary secondary and tertiary industries finally discussion of above results is presented and recommendations for the promotion of urban ce are proposed

an evaluation of the swedish system of active labour market programmes in the 1990s we investigate the presence of short and long term effects from joining a swedish labor market program vis a vis more intense job search in open unemployment overall the impact of the program system is found to have been mixed joining a program has increased employment rates among participants a result robust to a misclassification problem in the data on the other hand it has also allowed participants to remain significantly longer on unemployment benefits and more generally in the unemployment system this being particularly the case for those entitled individuals entering a program around the time of their unemployment benefits exhaustion

carrots and sticks pay supervision and turnover the efficiency wage model ewm has been advanced as an explanation for large and persistent wage differentials the shirking version of the ewm assumes a trade off between self supervision and external supervision the turnover version assumes turnover is costly to the firm variation across firms in the cost of monitoring shirking or turnover then is hypothesized to account for wage variations across firms for homogeneous workers using a new sample of firm data this paper presents empirical evidence of the trade off of wage premiums for supervisory intensity and turnover little evidence is found to support either version of the ewm

careers in foreign owned firms in japan this article examines how organizational environments affect labor market processes in japan i hypothesize that labor market inequality is generated through workers being positioned in either domestic or in foreign firms i apply the concept of social versus economic exchange to distinguish the nature of transactions between domestic and foreign firms i argue that foreign firms operate under an institutional context that is conducive to the economic mode of exchange which has enormous consequences for their personnel practices and reward systems using a dataset of japanese workers collected in 2000 i examine the extent to which employment practices in foreign firms deviate from the benchmark features observed in the japanese labor market my results confirm that employment in foreign firms significantly affects career outcomes the highcommitment culture commonly associated with the japanese workforce is an outcome of the organizational environment i find little evidence of japanese employment pra

consumer prices the consumer price index and the cost of living after presenting major findings and recommendations the cpi commission reiterates the estimate of a 1 1 percentage point per annum upward bias it rejects the contention that the bls already makes substantial corrections for quality change that quality improvements and new products accrue only to the rich and that procedures to make more extensive quality adjustments valuations of new products and adjustments for commodity and outlet substitution are impractical the bias in the cpi can be sharply reduced as the authors detail in this paper coauthors are ellen r dulberger robert j gordon zvi griliches and dale w jorgenson

wages and product market power this paper analyses time series on some 800 british manufacturing companies to address various questions concerning the role of insiders and market power in wage determination the following are the most important results first product market power has a positive impact on wages this impact is enhanced in large firms but is not influenced by union status second while firm specific factors influence wages the size of these effects is not influenced by union status firm size or product market power however product market power reduces the generally strong negative effect of unemployment on wages finally there is no robust evidence of insider power at work in wage setting irrespective of product market position

capital and labour mobility and their impacts on mexico s regional labour markets abstract this paper studies the effects of capital and labor mobility on real wages across mexican states for the period 1997 2006 employing dynamic panel data methods we find 1 strong positive effects on real wages from foreign direct investment fdi and from migration 2 domestic and foreign migration provide similar wage effects and 3 alternative partitions indicate that real wages are more sensitive to fdi related fluctuations across states with relatively lower wages and migration levels overall these results provide support that real wages respond positively to fluctuations in capital flows and labour movements as predicted from the theory

transactions cost economics and the multinational enterprise an assessment abstract this paper applies transactions cost principles to the multinational enterprise in order to ascertain its distinctive properties as a mode of economic organization the analysis helps identify just when and where contractual alternatives to the multinational firm are likely to be viable this turns out to depend upon the nature of the technology the regime of appropriability within which the firm operates and the characteristics of the markets in question transactions cost analysis is also extended to the multinational enterprise host country relationship implications for management and public policy are derived

multinational firms acquisitions and job tasks we revisit the question how inward fdi and multinational ownership affect relative labor demand motivated by the recent literature that distinguish between skills and tasks we argue that the impact of multinational and foreign ownership on the demand for labor is better captured by focusing on job tasks rather than education we use swedish matched employer employee data and find that changes of local firms to both foreign and swedish multinationals increase the relative demand for non routine and interactive job tasks in the targeted local firms hence in a high income country both inward and outward fdi have a task upgrading impact on local firms the effect is primarily driven by wage effects leading to increased wage dispersion for workers with different non routine and interactive task intensity we also show that the effect is not the same as skill upgrading since dividing employees by educational attainment does not capture changes in the relative labor demand hence our results suggest a new aspect of the labor market consequences of fdi less

multinationals cross border acquisitions and wage dispersion we examine the impact of cross border acquisitions on intra firm wage dispersion using a detailed swedish linked employer employee data set including data on all firms and about 50 of the swedish labour force with information on job tasks and education foreign acquisitions of domestic multinationals and local firms increase wage dispersion but so do also other types of cross border acquisitions hence it is the acquisition itself rather than foreign ownership that increases wage dispersion the positive wage effect is concentrated to ceos and other managers whereas other groups are either negatively affected or not affected at all

economic growth inequality democratization and the environment we augment the stokey 1998 model by allowing agents to differ with respect to environ mental quality and income in order to analyze the impact of income and environmental inequality and of democratization on aggregate pollution we find that the impact of a more equal income distribution depends on the degree of democracy in a complete democracy a more equal income distribution generates ceteris paribus less pollution which is consistent with indirect empirical evidence whereas the opposite is the case if democratic rights are highly restricted furthermore a democratization is argued to typically lower both the income and the environmental quality of the median voter in this case if in utility terms the fall in environmental quality is worse than the fall in consumption the median voter decides to tighten environmental legislation so that aggregate pollution decreases

local housing supply and the impact of history and geography this paper considers the impact of existing land use patterns on housing supply price elasticities in local areas of england under existing planning policies the paper demonstrates that despite

firm ownership preferences and host government restrictions an integrated approach two approaches may explain how multinational enterprises mnes select ownership structures for subsidiaries the first argues that mnes prefer structures that minimize that transaction costs of doing business abroad the second argues that ownership structures are determined by negotiations with host governments whose outcomes depend on the bargaining power of the firm this paper presents a framework integrating these two approaches and uses statistical methods to separate their effects empirically

inequality incomplete contracts and the size distribution of business firms this article analyzes the effects of intrafirm bargaining on the formation of firms in an economy with imperfect capital markets and contracting constraints in equilibrium wealth inequality induces a heterogeneous distribution of firm sizes allowing for firms both too small and too large in terms of technical efficiency the findings connect well to empirical facts such as the missing middle of firm size distributions in developing countries the model can encompass a nonmonotonic relationship between aggregate output and inequality it turns out that an inflow of capital may indeed decrease output in absolute terms

local taxation and urban development testing for the side effects of the italian property tax land is an essential yet limited natural resource its current unsustainable use asks for a better understanding of the main determinants of urban expansion a heuristic approach is used to analyze urban development in italy in particular the paper estimates an econometric model to test the impact of the italian property tax ici on the local authorities behavior and in particular on urban planning and development it tests whether its introduction has fostered rather than dampened construction activity the hypothesis put forward is that because of the concurrent market conditions the introduction of the tax has facilitated urban development the structure of the tax and the devolution process that began in the 90s induced local municipalities to adopt less tight accommodative urban policies to offset budgetary needs a more elastic urban policy reduces price volatility however its overall welfare effect is not clearly determined indeed ceteris paribus geographical areas with more elastic housing supply witness larger land consumption the land use changes we witnessed in the last decades could be the combined effect of financial and fiscal aspects if this is so careful attention should be given to the issue of whether leaving urban planning and the power to levy property taxes under the same jurisdiction

technology transfer and spillovers does local participation with multinationals matter this paper examines the effects on technology transfer and spillovers deriving from ownership sharing of foreign multinational affiliates more specifically we try to answer two questions using unpublished indonesian micro data firstly do establishments with minority and majority ownership differ in terms of productivity levels secondly does the degree of spillover differ with the degree of ownership in the fdi our results show that foreign establishments have comparable high levels of labor productivity and that domestic establishments benefit from spillovers however the degree of foreign ownership does neither affect the level of labor productivity in foreign establishments nor the degree of spillovers

a microeconometric evaluation of the active labour market policy in switzerland in the second part of the 1990 s switzerland conducted an ambitious active labour market policy almp encompassing a wide variety of programmes we evaluate the effects of these programmes on the individual employment probability of potential participants our econometric analysis uses unusually informative data origi nating from administrative unemployment and social security records we apply a matching es timator adapted for the case of multiple programmes we find substantial positive effects for one particular programme that is a unique feature of the swiss almp it consists of a wage subsidy for temporary jobs in the regular labour market that would otherwise not be taken up by the unemployed we also find large negative effects for traditional employment programmes oper ated in sheltered labour markets for training courses the results are mixed doi 10 1111 1468 0297 00072 download internet appendix pdf 2 590 kb

efficiency and ownership structure the case of poland we examine the effects of foreign entry on productive efficiency during the polish investment liberalisation the performance of foreign acquisitions is compared to foreign firms entering the marke

globalization returns to accumulation and the world distribution of output abstract this paper examines the extent to which the process of globalization can explain the observed widening in the cross country distribution of output per worker on the theoretical front the model highlights why when the labor market is subject to a holdup problem the opening up of trade will cause an increase in the dispersion of income across countries similar to that observed in the data the increase in dispersion in the model arises due to the emergence of a discrepancy between the private and social returns to capital accumulation that favors capital abundant countries on the empirical front we document the relevance of the model by examining whether growth patterns decomposition exercises and specialization patterns support the model s predictions overall we find that over 50 of the recently observed increase in income dispersion across countries can be accounted for by the mechanism exemplified by the model

foreign direct investment education and wages in indonesian manufacturing this paper examines whether the higher wages paid by foreign owned manufacturing plants than by domestically owned plants typical of most countries represents a higher price for labor that is does it reflect a higher price for workers of a given quality as represented by the level of education we then ask whether foreign owned plants pay a higher price for labor given the characteristics of the plants foreign owned firms are found to pay a higher price for labor of a given educational level than domestically owned ones only a part of the difference is associated with plant characteristics rather than ownership

export processing zones in madagascar a success story under threat summary the success of export processing zones or the zone franche in madagascar since 1990 is with the exception of mauritius an isolated and unknown case in africa this paper based on first hand data explains that the zone franche has had a highly significant macroeconomic impact in terms of exports and jobs we show that average wages in the zone franche are equivalent to the other formal activity sectors other things being equal and that labor standards there are higher than average the zone franche quickly recovered from the 2002 crisis and has benefited a great deal from agoa the final phase out of the multi fibre arrangement in 2005 is expected to have a negative impact on the zone franche

is there really a foreign ownership wage premium evidence from matched employer employee data numerous studies on firm level data have reported higher average wages in foreign owned firms than in domestically owned firms this however does not necessarily imply that the individual worker s wage increase with foreign ownership using detailed matched employer employee data on the entire swedish private sector we examine the effect of foreign ownership on individual wages controlling for individual and firm heterogeneity as well as for possible selection bias in foreign acquisitions we distinguish between foreign greenfields and takeovers and compare foreign owned firms with both domestic multinationals and local firms our results show a considerably smaller wage premium in foreign owned firms than what has been found in studies conducted at a more aggregate level moreover foreign takeovers of swedish firms tend to have no or even a negative effect on wages

cpi bias and real living standards in russia during the transition abstract the economies of the former soviet bloc experienced large declines in output during the decade of transition which began with the collapse of the soviet union in 1991 yet there are many reasons to believe that measured output and official deflators provide a poor proxy for the change in real living standards in transition economies this paper uses the engel curve methodology developed by hamilton hamilton b 2001 using engel s law to estimate cpi bias american economic review 91 3 619 630 to examine changes in real living standards in russia during the transition period and to provide an estimate of how much the official russian cpi has overstated consumer inflation we also examine changes in consumer durables home production and subjective well being to further evaluate changes in living standards our findings indicate that cpi bias has caused a substantial understatement of the growth performance of the russian economy during the transition even just allowing household final consumption to be deflated with bias we find that the level of real per capita gdp in 2001 may be understated by up to 30 compared with using a bias corrected deflator our analysis of consumer durables home production and subjective well being supports the conclusion that the decline in living standards has been substantially less than what is inferred by looking at official statistics on real output

insider effects in wage determination abstract the paper attempts to shed new light on the determinants of industry wages by a cross country comparison of wage setting relationships making use of comprehensive and consistent panel data on industries from the early 1960s to the mid 1980s the empirical analysis involves estimations of identically specified industry wage equations for each of five countries sweden norway finland germany and the united states a key finding is that industry wages in the u s are the most responsive to sectoral price and productivity changes by contrast industry wages in the nordic countries are largely unaffected by sectoral conditions the results cast doubt on the competitive model as an accurate characterization of wage setting under decentralization

labour mobility and returns to experience in foreign firms this paper uses finnish linked employer employee panel data to study whether employees are able to appropriate returns to knowledge accumulated in foreign owned firms when moving to domestic firms the estimates indicate that highly educated employees earn a return to prior experience in a foreign owned firm which is over and above the return to other previous experience these employees do not appear to pay for the knowledge they accumulate in the form of lower starting wages in foreign owned firms

do r d tax incentives lead to higher wages for r d workers evidence from the netherlands this paper examines the impact of the dutch r d tax incentive scheme on the wages of r d workers we construct firm specific r d tax credit rates that vary over time following variations in the dutch r d tax incentive program using instrumental variables we estimate a wage sharing model with an unbalanced firm level panel data covering the period 1997 2004 the elasticity of the r d wage with respect to the fraction of the wage supported by the fiscal incentives scheme is estimated at 0 2 in the short run and 0 24 in the long run

mandatory versus discretionary spending the status quo eect do mandatory spending programs such as medicare improve eciency we analyze a model with two parties allocating a xed budget to a public good and private transfers each period over an innite horizon we compare two institutions that dier in whether public good spending is discretionary or mandatory we model mandatory spending as an endogenous status quo since it is enacted by law and remains in eect until changed mandatory programs result in higher public good spending furthermore they ex ante pareto dominate discretionary programs when parties are patient persistence of power is low and polarization is low

spatial housing economics a survey this introduction to the virtual special issue surveys the development of spatial housing economics from its roots in neoclassical theory through more recent developments in social interactions modelling and touching on the role of institutions path dependence and economic history the survey also points to some of the more promising future directions for the subject that are beginning to appear in the literature the survey covers elements of hedonic models spatial econometrics neighbourhood models housing market areas housing supply models of segregation migration housing tenure subnational house price modelling including the so called ripple effect and agent based models possible future directions are set in the context of a selection of recent papers that have appeared in urban studies nevertheless there are still important gaps in the literature that merit further attention arising at least partly from emerging policy problems these include more research on housing and biodiversity

foreign ownership and wages evidence from hungary 1986 2008 this article estimates the wage effects of foreign direct investment fdi using firm level and linked employer employee panel data containing a large number of foreign acquisitions over a long per

foreign firms and chinese employment this paper examines the effect of foreign direct investment fdi on employment in the chinese manufacturing sector as one of the world s largest recipients of fdi china has arguably benefited from foreign multinational enterprises in various respects however one of the main challenges for china and other developing countries is job creation and the effect of fdi on employment is uncertain the effect depends on the amount of jobs created within foreign firms as well as the effect of fdi on employment in domestic firms we analyse fdi and employment in china using a large sample of manufacturing firms for the period 1998 2004 our results show that fdi has positive effects on employment growth the relatively high employment growth in foreign firms is associated with their firm characteristics and their high survival rate employment growth is also relatively high in private domestic chinese firms there also seems to be a positive indirect effect of fdi on employment in private domestically owned firms presumably caused by spillovers

the impact of foreign takeovers comparative evidence from foreign and domestic acquisitions in germany this study provides the first evidence of foreign takeover effects on the performance of acquired firms in germany that considers a general takeover effect through the comparison with domestic takeovers a propensity score matching approach combined with a difference in differences did estimator were performed with new high quality panel data for manufacturing enterprises provided by german official statistics the results indicate a negative impact of foreign takeovers on employment and no productivity improvements for the period 2007 2009 this evidence contradicts existing empirical evidence for germany which suggests significant productivity improvements and no changes in terms of employment these findings are of particular interest to germany as one of the most important fdi inflow destinations worldwide they contribute to the foreign ownership performance premium literature as well as improving the understanding of foreign acquisition consequences a subject of utmost topicality

does foreign investment liberalisation enhance women s economic status micro evidence from urban china this paper analyses the effects of inward foreign direct investment fdi on female earnings and women s economic status in households using chinese urban household survey data from 1997 to 2008 the identification exploits the substantial relaxation of foreign investment regulations immediately after china s accession to the wto in 2002 the difference in differences estimation results show that fdi liberalisation has improved women s economic status significantly by increasing female earnings in sectors more exposed to fdi further analyses indicate that foreign investment liberalisation facilitates the promotion of female employees in their career ladders and increases their skill premium which are two important channels through which women enhance their economic independence

did we lose the war on poverty was the war on poverty a failure or a success official u s poverty statistics based on household income imply that the war on poverty ended in failure according to the bureau of the census the proportion of the u s population below the poverty level of income reached a minimum of 11 1 percent in 1973 this ratio rebounded to 15 2 percent in 1983 and has fluctuated within a narrow range since then giving rise to the widespread impression that the elimination of poverty is difficult or even impossible 1 however poverty estimates based on household consumption imply that the war on poverty was a success jorgenson and slesnick 1989 showed that the proportion of the u s population below the poverty level of consumption fell to 10 9 percent in 1973 only slightly below the poverty incidence as measured by income in that year the poverty ratio for consumption declined further reaching 6 8 percent in 1983 slesnick 1993 presents estimates of poverty ratios incorporating consumption data from the consumer expenditure survey conducted by the bureau of labor statistics the poverty rate for consumption fell to 9 7 percent in 1973 and reached a low of 8 7 percent in 1978 before rising to 12 0 percent in 1980 the consumptionbased poverty rate then declined to a new low of 8 3 percent in 1986 ending at 8 4 percent in 1989 calibrating consumption to levels reported in the u s national income and product accounts slesnick obtained a poverty rate of 4 1 percent in 1978 and a postwar low in 1989 of only 2 2 percent 2 1 the persistence of poverty as reflected in the official statistics is discussed by sawhill 1988 2 slesnick 1993 presented a detailed decomposition of the differences between estimates of poverty rates based on consumption and the official estimates based on income neither measures of consumption from the consumer expenditure survey nor measures of income used by the bureau of the census include in kind transfers slesnick 1996 discussed the effects of these transfers on measures of poverty

trade wages and the political economy of trade protection evidence from the colombian trade reforms abstract worker industry affiliation plays a crucial role in how trade policy affects wages in many trade models yet most research has focused on how trade policy affects wages by altering the economy wide returns to a specific worker characteristic i e skill or education rather than through worker industry affiliation this paper exploits drastic trade liberalizations in colombia in the 1980s and 1990s to investigate the relationship between protection and industry wage premiums we relate wage premiums to trade policy in an empirical framework that accounts for the political economy of trade protection accounting for time invariant political economy factors is critical when we do not control for unobserved time invariant industry characteristics we find that workers in protected sectors earn less than workers with similar observable characteristics in unprotected sectors allowing for industry fixed effects reverses the result trade protection increases relative wages this positive relationship persists when we instrument for tariff changes our results are in line with short and medium run models of trade where labor is immobile across sectors or alternatively with the existence of industry rents that are reduced by trade liberalization in the context of the current debate on the rising income inequality in developing countries our findings point to a source of disparity beyond the well documented rise in the economy wide skill premium because tariff reductions were proportionately larger in sectors employing a high fraction of less skilled workers the decrease in the wage premiums in these sectors affected such workers disproportionately