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

information acquisition and under diversification if an investor wants to form a portfolio of risky assets and can exert effort to collect information on the future value of these assets before he invests which assets should he learn about the best assets to acquire information about are ones the investor expects to hold but the assets the investor holds depend on the information he observes we build a framework to solve jointly for investment and information choices with general preferences and information cost functions although the optimal research strategies depend on preferences and costs the main result is that the investor who can first collect information systematically deviates from holding a diversified portfolio information acquisition can rationalize investing in a diversified fund and a concentrated set of assets an allocation often observed but usually deemed anomalous copyright wiley blackwell

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

the gender earnings differential in the russian transition economy using data from the russia longitudinal monitoring survey rlms the first nationally representative household survey in the russian federation the author examines the gender earnings differentia

global feminization through flexible labor abstract the emphasis on structural adjustment and labor flexibility in both developing and industrialized economies is rapidly altering the nature of employment women are being substituted for men and many forms of work are being converted into the kinds of jobs traditionally geared to women international data on recent trends in female economic activity reveal that new types of labor data are needed to highlight the mechanisms of control over workers and the actual economic forms of vulnerability to which women are exposed the paper concludes by posing questions that challenge the traditional concerns of donors and policy makers in many developing countries

the gender gap fertility and growth changes in fertility have long been recognized as important correlates of economic growth with the relationship between the level of fertility and the level of income per capita being one of the strongest observable correlations in cross country data this paper examines the linkages between fertility and growth theory the structure of the model is presented in sections on production couples decision making system dynamics and steady state equilibria the first component of the model is that increases in capital per worker raise womens relative wages since capital is more complementary to womens labor input than to mens the second component is that increasing womens relative wages reduces fertility by raising the cost of children more than household income finally lower fertility raises the level of capital per worker a positive feedback loop generates demographic transition a rapid decline in fertility accompanied by accelerated output growth

inter city competition for foreign investment static and dynamic effects of china s incentive areas abstract china s open door policy has created a natural experiment for studying agglomeration externalities and the role of incentives designed to attract foreign direct investment we build a model which predicts that foreign firms will prefer cities where other foreign firms are located we estimate the model using data on 931 foreign ventures we then use simulations to explore the effect policies favoring particular cities had on the distribution of investment we find that attractive cities those with good infrastructure and an established industrial base gained most and that agglomeration effects greatly magnified the direct impact of policy

imperfect choice or imperfect attention understanding strategic thinking in private information games to understand the thinking process in private information games we use mousetracking to record which payoffs subjects attend to the games have three information states and vary in strategic complexity subjects consistently deviate from nash equilibrium choices and often fail to look at payoffs which they need to in order to compute an equilibrium response choices and lookups are similar when stakes are higher when cluster analysis is used to group subjects according to lookup patterns and choices three clusters appear to correspond approximately to level 3 level 2 and level 1 thinking in level k models and a fourth cluster is consistent with inferential mistakes as for example in qre or cursed equilibrium theories deviations from nash play are associated with failure to look at the necessary payoffs the time durations of looking at key payoffs can predict choices to some extent at the individual level and at the trial by trial level

racial discrimination in the labor market theory and empirics we review theories of race discrimination in the labor market taste based models can generate wage and unemployment duration differentials when combined with either random or directed search even when strong prejudice is not widespread but no existing model explains the unemployment rate differential models of statistical discrimination based on differential observability of productivity across races can explain the pattern and magnitudes of wage differentials but do not address employment and unemployment at their current state of development models of statistical discrimination based on rational stereotypes have little empirical content it is plausible that models combining elements of the search models with statistical discrimination could fit the data we suggest possible avenues to be pursued and comment briefly on the implication of existing theory for public policy jel j15 j31 j64 j71

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

international competition income distribution and economic growth this paper shows that the neo keynesian case for wage led growth does not generally hold in an open economy model wage increases cause a loss of competitiveness that reduces the trade balance if the economy is relatively open to trade and price elasticities satisfy certain restrictions the worsening of the trade balance more than outweighs the increase in workers consumption thus reducing the growth rate the main theoretical innovation is a flexible markup pricing rule that allows changes in unit labor costs and exchange rates to affect profit margins implications for international relations and class conflict are discussed copyright 1989 by oxford university press

simple market equilibria with rationally inattentive consumers we study a market with rationally inattentive consumers who are unsure of the terms of the offers made by firms but can acquire information about the terms at a cost in a symmetric equilibrium the price set by firms is continuously increasing in the cost of information for consumers and decreasing in the number of firms operating in addition favorable a priori information about a firm leads it to set a higher price and a new entrant can increase demand for incumbents when consumers have heterogeneous costs of information firms selling low quality products may choose to set the highest prices

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

waiting for change adjustment and reform in cuba abstract buffeted by the collapse of trading relations with the former socialist bloc and the continuing us embargo cuba has attempted to adjust to external crisis via tighter rationing to curtail demand and traditional planning and sectoral strategies to expand the supply of tradables this overall program has failed and cuba has recently begun timid steps toward a more market oriented approach we argue that the centerpiece of a new strategy should be a rapid privatization which can be designed to absorb the monetary overhang widely distribute assets and control and protect the social safety net that has characterized the cuban economy

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 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

a decomposition method on employment and wage discrimination and its application in urban china 2002 2013 abstract labor market discrimination is an important issue in developing countries where path dependent institutions have been dominant while effective institutional arrangements and policies have been hidden by local customs and culture however the existing applications of classical blinder oaxaca decomposition face criticism for their imprecise understanding of the factors affecting institutional discrimination in labor markets as well as for their lack of power in formulating well targeted anti discrimination policies following oaxaca 1973 we propose a new method to decompose the total discrimination index tdi to analyze employment and wage discrimination in the labor markets of developing countries the tdi is decomposed into the employment discrimination index edi and the wage discrimination index wdi then into the underpayment index to majorities upi and the overpayment index to minorities opi we apply this method to the institutional discrimination against rural migrants in china s urban areas using national representative data from 2002 to 2013 we have found that 1 the tdi increased quickly after china entered the wto then dropped after anti discrimination policies were implemented 2 the tdi is mainly determined by the upi while the tdi s fluctuation is mainly determined by the wdi our method provides insights into the changing composition of employment and wage discrimination and their respective labor market outcomes in developing countries as a result appropriate policy measures may be developed accordingly

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

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

market expansion state intervention and wage differentials between economic sectors in urban china a multilevel analysis the rising earnings inequality in china has sparked a heated debate on the socioeconomic outcomes of market transformation while a large body of literature has focussed on the temporal trend of wage inequality during the reform period much less attention has been devoted to the structural causes of regional variations in sectoral wage differentials using a micro data sample from the 2005 one percent population sample survey and multilevel methods this article examines the geographic variability of wage differentials between economic sectors in urban china with a particular focus on the combination effects of market expansion and state intervention the results indicate that sectoral wage differentials vary substantially across regions and that market expansion interacts with state intervention to reconfigure earnings outcomes specifically prefectures located in the interior region tend to exhibit a large wage premium for the state sectors while prefectures located in the coastal region tend to di

cuban planning in the mid 1980s centralization decentralization and participation abstract the paper examines the cuban planning system in the light of economic reforms in other state socialist countries investigating the advisability and feasibility of market type reforms in the current cuban context the cuban system remains highly centralized in spite of recent attempts to introduce more popular participation and make greater use of economic levers in the planning process but basic trends in and challenges facing the cuban economy in the 1980s may be strengthening the case for greater economic decentralization and expansion of markets

neuroeconomic foundations of economic choice recent advances neuroeconomics combines methods and theories from neuroscience psychology economics and computer science in an effort to produce detailed computational and neurobiological accounts of the decision making process that can serve as a common foundation for understanding human behavior across the natural and social sciences because neuroeconomics is a young discipline a sufficiently sound structural model of how the brain makes choices is not yet available however the contours of such a computational model are beginning to arise and given the rapid progress there is reason to be hopeful that the field will eventually put together a satisfactory structural model this paper has two goals first we provide an overview of what has been learned about how the brain makes choices in two types of situations simple choices among small numbers of familiar stimuli like choosing between an apple or an orange and more complex choices involving tradeoffs between immediate and future consequences like eating a healthy apple or a less healthy chocolate cake second we show that even at this early stage insights with important implications for economics have already been gained

pinocchio s pupil using eyetracking and pupil dilation to understand truth telling and deception in sender receiver games we conduct laboratory experiments on sender receiver games with an incentive for senders to exaggerate such as security analyst s painting a rosy picture about earnings prospects our results show that overcommunicati on messages are more informative of the true state than they should be in equilibri um is consistent with a level k model eyetracking shows that senders look much more on the payoff rows corresponding to the true state and much less at receiver payoffs than at their own payoffs senders pupils also dilate more when their deception is larger in magnitude together these data are consistent with the hypothesis that figuring out ho w to deceive another player is cognitively difficult as assumed in the level k mod el a combination of sender messages and lookup patterns predicts the true state about t wice as often as predicted by equilibrium using these measures would enable receiver subjects to hypothetically earn up to 16 21 percent more than they actually do

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

do landlords discriminate in the rental housing market evidence from an internet field experiment in us cities abstract this paper tests for racial discrimination in the rental housing market using matched pair audits conducted via e mail for rental units advertised on line we reveal home seekers race to landlords by sending e mails from names with a high likelihood of association with either whites or african americans generally discrimination occurs against african american names however when the content of the e mail messages insinuates home seekers with high social class discrimination is non existent racial discrimination is more severe in neighborhoods that are near tipping points in racial composition and for units that are part of a larger building

implications of rational inattention abstract a constraint that actions can depend on observations only through a communication channel with finite shannon capacity is shown to be able to play a role very similar to that of a signal extraction problem or an adjustment cost in standard control problems the resulting theory looks enough like familiar dynamic rational expectations theories to suggest that it might be useful and practical while the implications for policy are different enough to be interesting

does foreign direct investment affect wage inequality an empirical investigation we use a panel of more than 100 countries for the period 1980 2002 to analyse the relationship between inward foreign direct investment fdi and wage inequality we particularly check whether this relationship is nonlinear in line with a theoretical discussion we find that the effect of fdi differs according to the level of development we depict two different patterns one for oecd developed and one for non oecd developing countries results suggest the presence of a nonlinear effect in developing countries wage inequality increases with fdi inward stock with such effect diminishing with further increases in fdi for developed countries wage inequality decreases with fdi inward stock and there is no robust evidence to show that this effect is nonlinear

stagnation income distribution and monopoly power the deceleration in the rate of industrial growth in the indian economy since the middlesixties initially interpreted by some as a temporary downward deviation from trend hasnow come to be generally accepted as reflecting long run tendencies towards stagnation several explanations for these tendencies have been offered bhagwati and desai 1970 and bhagwati and srinivasan 1975 have focused on inefficiencies and the misallocationof resources arising from industrial policies pursued by the government others chakravarty 1974 raj 1976 and vaidyanathan 1974 among them have emphasisedthe sluggishness of agricultural growth which is alleged to have retarded industrial growthby limiting markets and the supply of wage goods and raw materials a third view reflectedin srinivasan and narayana 1977 for example has put the blame on a slackening of invest ment demand due to lower public investment but does not explain why public investmentfell or why its fall restrained industrial growth finally there is the explanation put forthin bagchi 1970 1975 1982 in nayyar 1978 and in parts of mitra 1977 that inequali ties in income distribution have resulted in a limited demand for industrial goods reducedincentives for investment and therefore reduced growth this view seems to suggest apositive relation between growth and income equality which is opposed to the generallyaccepted idea derived from cambridge growth models that higher growth requires greaterinequality the purpose of this paper is to examine the last explanation by considering the inter action between growth and income distribution in an underdeveloped economy with thehelp of a simple macroeconomic model the model is a stylisation of the indian economy so that we will be able to use the model to assess the argument that a deceleration in therate of growth of the indian industrial economy could have been caused by an unequaldistribution of income the argument will not be made that this income distributional con straint is the binding constraint on industrial growth the model will merely examine theinternal consistency of the argument that a bad income distribution could explain stagnation in the sense of reduced growth and show that in the indian context as in other similarcontexts this argument can be put forward in explaining stagnation our argument is first presented with a highly simplified schematisation of the indianeconomy which we shall call the basic model the economy modelled produces only one

trends in the gender earnings differential in urban china 1988 2004 this paper analyzes changes in the gender earnings gap in urban china over the period 1988 2004 using urban household survey data the mean female male earnings ratio declined from 86 3 to 76 2

rational inattention and migration decisions abstract acquiring information about destinations can be costly for migrants we model information frictions in the rational inattention framework and obtain a closed form expression for a migration gravity equation that we bring to the data the model predicts that flows from countries with a higher cost of information or stronger priors are less responsive to variations in economic conditions in the various destinations as migrants rationally get less information before deciding where to move the econometric analysis reveals systematic heterogeneity in the pro cyclical behavior of migration flows across origins that is consistent with the existence of information frictions

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

are emily and greg more employable than lakisha and jamal a field experiment on labor market discrimination we study race in the labor market by sending fictitious resumes to help wanted ads in boston and chicago newspapers to manipulate perceived race resumes are randomly assigned african american or white sounding names white names receive 50 percent more callbacks for interviews callbacks are also more responsive to resume quality for white names than for african american ones the racial gap is uniform across occupation industry and employer size we also find little evidence that employers are inferring social class from the names differential treatment by race still appears to still be prominent in the u s labor market jel j71 j64

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

gender inequality and economic growth a cross country analysis abstract this paper investigates empirically the determinants of economic growth for a set of semi industrialized export oriented economies in which women provide the bulk of labor in the export sector the primary hypothesis tested is that gender inequality which contributes to women s relatively lower wages was a stimulus to growth via the effect on exports during 1975 95 empirical analysis shows that gdp growth is positively related to gender wage inequality in contrast to recent work which suggests that income inequality slows growth evidence also indicates that part of the impact of gender wage inequality on growth is transmitted through its positive effect on investment as a share of gdp

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

will affirmative action policies eliminate negative stereotypes a key question concerning affirmative action is whether the labor market gains it brings to minorities can continue without it becoming a permanent fixture in the labor market the authors argue that this depends on how the policy affects employers beliefs about the productivity of minority workers they study the joint determination of employer beliefs and worker productivity in a model of statistical discrimination in job assignments the authors prove that even when identifiable groups are equally endowed ex ante affirmative action can bring about a situation in which employers correctly perceive the groups to be unequally productive ex post copyright 1993 by american economic association

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

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

costly information acquisition experimental analysis of a boundedly rational model the directed cognition model assumes that agents use partially myopic option value calculations to select their next cognitive operation the current paper tests this model by studying information acquisition in two experiments in the first experiment information acquisition has an explicit financial cost in the second experiment information acquisition is costly because time is scarce the directed cognition model successfully predicts aggregate information acquisition patterns in these experiments when the directed cognition model and the fully rational model make demonstrably different predictions the directed cognition model better matches the laboratory evidence jel d83

export orientation and female share of employment evidence from turkey abstract we investigate the relationship between export orientation and female share of employment in the turkish manufacturing sector during 1983 85 following the onset of export led industrialization policies using plant level data we find that female share of employment in a plant increases with the export to total output ratio of its sector the contribution of the study to the literature is its use of plant level data for a large number of plants enabling us to control for other determinants of female share of employment such as workers skill composition at the plant level

fdi impact and spillover evidence from china s electronic and textile industries m ultinational corporations mncs may invest in a host country when they possess non tangible productive assets that cannot be easily licensed but can be transferred within the firm direct equity participation in the host country is therefore required for mncs to reap the rents from their nontangible productive assets which may include technological know how marketing and managing skills relationships with suppliers and customers and reputation if foreign direct investment fdi does effectively convey these assets we should expect fdi to boost the productivity of the host country firms that receive fdi a more complex issue is the indirect spillover effects of fdi to non fdi domestic firms to the extent that fdi may bring new products and technologies to the host country non fdi receiving domestic firms may also stand to benefit from fdi through personnel turnover demonstration effects and knowledge spillovers the presence of fdi in a certain industry however may exert adverse effect on domestic firms in that industry by enjoying better technologies and lower production costs firms with fdi may cut into the market share of domestic firms without fdi in a short run imperfectly competitive market structure the productivity of domestic firms may be reduced when sales fall so that fixed costs are spread over fewer units in the long run however the increased competition induced by the increased presence of fdi in domestic industries may force

the effects of structural change and economic liberalisation on gender wage differentials in south korea and taiwan this paper investigates the sources of divergent trends in gender wage differentials in two important newly industrialised economies nies south korean and taiwan as these economies have entered the post industrial phase of development gender wage differentials in taiwan s manufacturing sector have widened while in korea they have narrowed decomposition analysis is used to broadly identify sources of change in gender wage differentials multivariate regression analysis is relied on to differentiate the impact on the gender wage gap of 1 macro levels policies 2 institutional factors and 3 shifts in labour demand and supply in addition to the predictable effects of several standard supply side variables in taiwan physical capital mobility is found to have contributed to a wider gender earnings gap women s greater concentration in industries where capital is mobile may explain this result the effects of capital mobility in korea appears to differ which may be due to the dissimilar characters of outward fdi from that country copyright 2000 by oxford university press

the causes and consequences of distinctively black names in the 1960s blacks and whites chose relatively similar first names for their children over a short period of time in the early 1970s that pattern changed dramatically with most blacks particularly those living in racially isolated neighborhoods adopting increasingly distinctive names but a subset of blacks actually moving toward more assimilating names the patterns in the data appear most consistent with a model in which the rise of the black power movement influenced how blacks perceived their identities among blacks born in the last two decades names provide a strong signal of socioeconomic status which was not previously the case we find however no negative relationship between having a distinctively black name and later life outcomes after controlling for a child s circumstances at birth

globalization and the gender wage gap there are several theoretical reasons why globalization will have a narrowing as well as widening effect on the gender wage gap but little is known about the actual impact except for a number of country studies the author provides a cross country study of the impact of globalization on the occupational gender wage gap based on the rarely used but most far ranging survey of wages around the world the international labour organization s october inquiry this annual survey was started in 1924 and contains a wealth of information on wages and the gender wage gap for the period 1983 99 there is information on the gender wage gap in 161 narrowly defined occupations in more than 80 countries around the world the author finds the following i the occupational gender wage gap appears to be narrowing with increases in gdp per capita ii there is a significantly narrowing impact of trade and foreign direct investment fdi net inflows on the occupational gender wage gap for low skill occupations both in poorer and richer countries and for high skill occupations in richer countries iii there is no evidence of a narrowing impact of trade but there is evidence of a widening impact of fdi net inflows on the high skill occupational gender wage gap in poorer countries iv wage setting institutions have a strong impact on the occupational gender wage gap in richer countries

sex discrimination in restaurant hiring an audit study in an audit study of sex discrimination in hiring comparably matched pairs of men and women applied for jobs as waiters and waitresses at restaurants in philadelphia in high price restaurants where earnings are higher job applications from women had an estimated probability of receiving a job offer that was lower by about 0 4 and an estimated probability of receiving an interview that was lower by about 0 35 both estimated differentials are statistically significant additional evidence suggests that customer discrimination partly underlies the hiring discrimination

orchestrating impartiality the impact of blind auditions on female musicians a change in the audition procedures of symphony orchestras adoption of blind auditions with a screen to conceal the candidate s identity from the jury provides a test for sex biased hiring using data from actual auditions in an individual fixed effects framework we find that the screen increases the probability a woman will be advanced and hired although some of our estimates have large standard errors and there is one persistent effect in the opposite direction the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras

field experiments of discrimination in the market place controlled experiments using matched pairs of bogus transactors to test for discrimination in the marketplace have been conducted for over 30 years and have extended across 10 countries significant persistent and pervasive levels of discrimination have been found against non whites and women in labour housing and product markets rates of employment discrimination against non whites in excess of 25 have been measured in australia europe and north america a small number of experiments have also investigated employment discrimination against the disabled in britain and the netherlands and against older applicants in the united states

a language theory of discrimination any advanced industrial society is composed of a number of speech communities with different verbal and nonverbal languages in particular in the united states blacks and whites and men and women have sharply differing methods of speaking and listening this paper develops a model in which people can only work together if they speak the same language and in which it is costly to learn a second language the competitive market will tend to minimize communication through segregation but if interaction is required the cost will be borne by the minority a number of nontrivial predictions are derived from the model

revealed preference rational inattention and costly information acquisition we develop a revealed preference test for optimal acquisition of costly information the test encompasses models of rational inattention sequential signal processing and search we provide limits on the extent to which attention costs can be recovered from choice data we experimentally elicit state dependent stochastic choice data of the form the tests require in simple cases tests con rm that subjects adjust their attention in response to incentives as the theory dictates

trade institution quality and income inequality summary we examine the effect of trade on income inequality in small developing countries we use two well accepted trade cost variables for identification one is based on baltic dry index and another is commodities price index our main finding is that trade leads to a significant reduction increase in income inequality in autocracies democracies to explain such different effects we provide supporting evidence that autocracies export more primary commodities and may follow the stolper samuelson theorem in ho framework while democracies active in manufacturing outsourcing may follow feenstra and hanson 1996 task model

anticipatory sorting and gender segregation in temporary employment we examine the roots of gender segregation in the screening process by using a longitudinal data set of candidates considered for temporary projects at a staffing firm and following their progress through the hiring pipeline theories invoked to explain gender segregation across jobs traditionally rely on firm specific human capital and expectations of future commitment to explain this phenomenon these do not apply in this setting yet we find that the staffing firm is more likely to shortlist women for low paid projects and less likely to do so for high paid ones these effects are due to women being considered for different projects than men and associated at least partially to the level of competition within vacancies although client companies also exhibit some gender sorting behavior in the later steps of the hiring process they are more likely to prefer women and less likely to sort them into lower paid projects our findings are consistent with anticipatory gender sorting mechanisms by which first screeners generate segregation when narrowing down the pool of candidates for later decision makers we discuss the implications of this case for theories of gender stratification and workplace inequality especially in mediated labor markets this paper was accepted by jesper sorensen organizations

modeling the effects of trade on women at work and at home abstract foreign trade affects women s wages and jobs their household work and their leisure this paper develops a model which covers not only all the sectors of the market economy but also social reproduction and leisure activities for women and men separately the model which in other respects is a standard cge computable general equilibrium model is applied to a simplified set of data for bangladesh its use is illustrated by simulating the gendered effects of changes in trade policies and capital flows

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

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

growth in women s relative wages and in inequality among men one phenomenon or two although increased wage inequality among men during the past three decades has received more attention the growth in women s wages has been equally remarkable in fact by one measure of inequality the ninth decile median ratio the proportional growth in inequality has moved in exact proportion with the female male wage ratio it is suggested that both result from expansion in the value of brains relative to brawn there is no way of knowing the full story of growth in women s relative wages and it is important not to dismiss the import of changing career patterns as is evident in the panel data increasing labor market participation must be important so too are the implications that follow the movement of women from the home to the job

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

the problem of balance in the peripheral socialist economy a conceptual note abstract the structure of the peripheral socialist economy is fundamentally distinct from the classical socialist economy upon which the planning literature has been based essentially this derives from the fact that the constraint on growth is foreign exchange and not the supply of labour or wage goods as such in consequence the possibilities for accumulation depend on international rent and depression of popular consumption does not in fact contribute much to the rate of growth three different sectors of the peripheral socialist economy can be identified and related to problems of accumulation and planning

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

ignorance isn t bliss uninformed voters drive budget cycles abstract the paper shows that blissful ignorance does not apply to fiscal policy in countries with uninformed voters politicians attempt to buy votes by substantially increasing government expenditures in election years this generates budget cycles and costly macroeconomic fluctuations unlike much of the earlier literature that found this effect only in low income countries or new democracies we demonstrate that it has occurred in many prosperous countries with an established political system in particular constructing a comprehensive informed voter infovot index and quantifying it for the 1995 2014 period we show that only the top third of oecd countries with well informed voters has not experienced political budget cycles in contrast the bottom third of oecd countries with poorly informed voters has consistently seen a deterioration of the budget balance by 0 7 1 2 of gdp in election years this represents an increase of 18 30 relative to their usual non election budget deficits interestingly for the intermediate group of countries with moderately informed voters for example austria france germany japan luxembourg the u k and the u s election budget cycles occurred during the 1995 2008 period but not since we discuss why their election year deficit hikes of 0 5 0 8 of gdp may have disappeared after the global financial crisis drawing on the rational inattention literature all our results are supported by a large number of robustness checks including the use of a yearly version of the index yinfovot we conclude by offering some policy recommendations that may improve the voters incentives to process fiscal policy information as such they could help to escape an ignorance trap whereby uniformed voters choose politicians whose policies reinforce the voters ignorance

unemployment and the real wage the economic basis for contesting political ideologies using the keynesian theory of effective demand this paper demonstrates how particular models such as that of cooperative capitalism enunciated by the left keynesian social democrats the marxian model of profit squeeze emphasizing distributive conflict and even the conservative model relying on supply side stimulus fit in as particular variants of a more general theoretical scheme through a reconstruction of the familiar is schedule the argument is weaved around the theme of the relations between unemployment and real wage in the context of both a closed and an open economy to explain the common macroeconomic basis of contesting ideologies copyright 1990 by oxford university press

macroeconomic consequences of cyclical and secular changes in feminization an experiment at gendered macromodeling abstract this paper analyzes the macroeconomic implications of cyclical and secular movements in the feminization of the labor force and changes in the intensity of female household labor we assume that a rise in the feminization of the labor force stimulates investment while a rise in the intensity of female household labor raises savings we examine the interaction of these two effects in the context of a dynamic keynesian growth cycle model and assess the likelihood of a structurally adjusting economy experiencing a recovery through feminization our analysis shows that for a gender based recovery to succeed the impact of feminization of the labor force on investment must be stronger than the impact a rising intensity of female household labor has on savings our analysis shows that high and high middleincome countries are more likely to benefit from feminization processes

patterns of cuban development the first twenty five years abstract this paper interprets the post 1959 evolution of cuban economic policymaking and performance as a function of the shifting and interacting domestic and foreign sources of surplus accumulation policy choices previously seen as strictly subjective such as the use of moral incentives in the late 1960s are attributed objective components the tensions between decentralization and centralization market and plan private and public agriculture and industry efficiency and equity are discussed in relation to domestic surplus generation the role of soviet aid commodity prices trading patterns and debt repayment are treated in analyzing foreign influences on surplus generation

electoral competition with rationally inattentive voters how do voters allocate costly attention to alternative political issues and how does selective ignorance of voters interact with policy design by politicians we address these questions by developing a model of electoral competition with rationally inattentive voters rational inattention amplies the eects of preference intensity because voters pay more attention where stakes are higher the model has many potential applications and those that we discuss in more detail imply that extremist voters are more attentive and inuential public goods are under provided divisive issues receive more attention and less transparent candidates choose more extreme policies endogenous attention can also lead to multiple equilibria explaining how poor voters in developing countries can be politically empowered by welfare programs

evidence on discrimination in consumer markets economists have contributed to the measurement of racial and ethnic discrimination in consumption and to the identification of its causes especially in housing markets and car sales to test the hypothesis that discrimination exists economists have turned to regression analysis and to audits a matched pair survey technique economists also have developed audit based measures of the incidence and severity of discrimination audit studies find continuing high levels of discrimination against minorities in the marketing of available housing and in car prices audit studies also find that discrimination can be caused both by economic agents prejudice and by their search for profits

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

experimental research on labor market discrimination understanding whether labor market discrimination explains inferior labor market outcomes for many groups has drawn the attention of labor economists for decades at least since the publication of gary becker s the economics of discrimination in 1957 the decades of research on discrimination in labor markets began with a regression based decomposition approach asking whether raw wage or earnings differences between groups which might constitute prima facie evidence of discrimination were in fact attributable to other productivity related factors subsequent research responding in large part to limitations of the regression based approach moved on to other approaches such as using firm level data to estimate both marginal productivity and wage differentials in recent years however there has been substantial growth in experimental research on labor market discrimination although the earliest experiments were done decades ago some experimental research on labor market discrimination takes place in the lab but far more of it is done in the field which makes this particular area of experimental research unique relative to the explosion of experimental economic research more generally this paper surveys the full range of experimental literature on labor market discrimination places it in the context of the broader research literature on labor market discrimination discusses the experimental literature from many different perspectives empirical theoretical and policy and reviews both what this literature has taught us thus far and what remains to be done

the sources of asian pacific economic growth the objective of this study is to analyze the sources of economic growth of ten asian pacific countries apcs china hong kong indonesia japan malaysia the philippines singapore south korea taiwan and thailand in conjunction with four industrialized western countries iwcs france west germany united kingdom and the united states in the postwar period in previous studies boskin and lau 1990 and kim and lau 1994c find for the group of five g 5 and the east asian newly industrialized countries nics respectively that 1 all countries share the same aggregate metaproduction function in terms of efficiency equivalent units and 2 technical progress can be represented in all countries as purely capitalaugmenting however kim and lau 1994c also find that there has been no measured technical progress in the east asian nics despite their much higher rates of economic growth the questions of interest in this study are 1 does the same aggregate meta production function that applies to the g5 countries and the east asian nics also apply to other apcs 2 does the finding of absence of technical progress hold for all the other apcs except japan and 3 what is the relative importance of the different sources of economic growth for the apcs

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

optimal sticky prices under rational inattention this paper presents a model in which price setting firms decide what to pay attention to subject to a constraint on information flow when idiosyncratic conditions are more variable or more important than aggregate conditions firms pay more attention to idiosyncratic conditions than to aggregate conditions when we calibrate the model to match the large average absolute size of price changes observed in micro data prices react fast and by large amounts to idiosyncratic shocks but only slowly and by small amounts to nominal shocks nominal shocks have strong and persistent real effects we use the model to investigate how the optimal allocation of attention and the dynamics of prices depend on the firms environment jel e 3 e5 d8

globalization and gender wage inequality in china summary this paper uses an enterprise population level dataset to investigate the link between globalization and gender inequality in the chinese labor market we find that foreign and exporting firms employ more female workers than domestic nonexporters foreign participation and export orientation within the same region and industry significantly encourage female employment and reduce the gender wage gap furthermore we show that while a large gender wage gap exists for foreign and exporting firms it mainly reflects the difference in gender productivity gender wage discrimination is observed only among private nonexporting firms overall our results highlight the importance of globalization in encouraging female employment and reducing gender discrimination

viewpoint male female wage differentials how can that be abstract the paper outlines the main empirical procedures that are used to document the male female wage differential and the extent to which it reflects discrimination it then discusses the evidence on male female wage differentials their existence the extent to which they reflect discrimination their changes over time and the factors that influence the gap particular attention is paid to more recent studies that control for a wider range of conventionally unobserved factors theoretical perspectives are then outlined focusing on the issue of how discriminatory wage differentials can survive given the forces of competition the impacts of policy initiatives are also discussed

north south trade and female labour in manufacturing an asymmetry a simple method of measuring the impact of north south trade on the female intensity of manufacturing is applied to data for developed and developing countries the results confirm that growth of exports has increased the relative demand for female labour in the south however there does not appear to have been a general counterpart reduction in the relative demand for female labour in northern manufacturing even among blue collar workers there are several possible reasons for the apparent conflict between these findings and other evidence that in northern manufacturing females have been disproportionately displaced by trade with the south

swimming upstream trends in the gender wage differential in the 1980s using michigan panel study of income dynamics data for 1979 and 1988 we analyze how a falling gender wage gap occurred despite changes in wage structure unfavorable to low wage workers the decrease is traced to gender specific factors which more than counterbalanced changes in measured and unmeasured prices working against women supply shifts net of demand were unfavorable for women generally and hurt high skilled more than middle and low skilled women by analyzing wages we find support for the notion of a gender twist in supply and demand having its largest negative effect on high skilled women

discrimination in the rental housing market a field experiment on the internet this paper presents a field experiment on discrimination in the housing market using the internet as a research platform the procedure involved our creating three fictitious persons with distinct

attention discrimination theory and field experiments with monitoring information acquisition we link two important ideas attention is scarce and lack of information about an individual drives discrimination in selection decisions our model of allocation of costly attention implies that applicants from negatively stereotyped groups face attention discrimination less attention in highly selective cherry picking markets where more attention helps applicants and more attention in lemon dropping markets where it harms them to test the prediction we integrate tools to monitor information acquisition into correspondence field experiments in both countries we study we find that unfavorable signals minority names or unemployment systematically reduce employers efforts to inspect resumes also consistent with the model in the rental housing market which is much less selective than labor markets we find landlords acquire more information about minority relative to majority applicants we discuss implications of endogenous attention for magnitude and persistence of discrimination in selection decisions returns to human capital and potentially for policy