# **Notes**

Department of Economics, University of Oxford and CEPR. Address: Manor Road Building, Manor Road, Oxford OX1 3UQ, United Kingdom. Email: beata.javorcik@economics.ox.ac.uk. This article was originally prepared as a background paper for the _2013 World Development Report._ The author would like to thank Ann Harrison, Emmanuel Jimenez, Yue Li and two anonymous reviewers for helpful comments and suggestions.

> 1 The _2013 World_ Development Report (WDR) offers other examples of jobs with a broader positive impact on the society. For instance, the employment of women can result in improvements in their children‘s educational attainment and health. The availability of jobs that are suitable for women can increase parents’ incentives to invest in girls’ education. Jobs requiring that require interactions with other ethnic, social, or religious groups may contribute to building social cohesion. In turbulent environments, employment opportunities for young people can provide alternatives to violence and help restore peace. The WDR also gives provides examples of bad jobs. These are jobs that exploit workers, expose them to dangerous environments, or threaten their physical and mental well-being. These may also be jobs producing that produce negative externalities. For example, although jobs supported through transfers or privilege are lucrative to their holders, they undermine opportunities for others to find remunerative employment. Similarly, jobs that damage the environment put take a toll on the society.

> 2 The foreign wage premium decreases once firm characteristics, such as size, are controlled for (Harrison and Rodriquez-Clare 2010). However, a larger size of foreign affiliates may be a reflection of their superior productivity and thus a direct effect of their ownership status _per se_ (see Arnold and Javorcik 2009) _._

> 3 Rent sharing implies that workers’ wages are related to the employer’s ability to pay.

> 4 Firm-level studies are unable to separate the effect of the wage changes of continuing workers from the impact of the changing composition of the labor force. If foreign acquisitions result in increased reliance on skilled labor, they will automatically lead to an increase in the average wage and a firmlevel foreign wage premium.

> 5 In other words, for each future acquisition target they find another (control) firm similar in terms of observable characteristics that will not be acquired by foreign interests. The underlying assumption is that the performance of the control firm is an accurate reflection of how the acquired firm would have performed in the absence of the ownership change.

> 6 Firm controls include industry and region fixed effects, log employment and its square and the average wage, whereas worker controls encompass wages, gender, age, age squared, and tenure.

> 7 The authors caution the reader that nearly half of workers with both pre- and post-acquisition observations have only a single observation either pre- or post-acquisition. Thus, these results most likely suffer from attenuation bias.

> 8 The group includes the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia. Because the 2003 figures were not available for Lithuania and Slovenia, the 2002 data were used for these countries.

> 9 A relevant example of organizational changes introduced by a foreign investor in its Chinese affiliate is presented in Sutton (2005) and cited by Arnold and Javorcik (2009). According to the interviewed engineer, what mattered was not the obvious alternation to the physical plant but rather inducing a shift in work practices. This shift involved a move away from traditional notions of inspection at the end of the production line to a system in which each operator along the line searched for defects in each item as it arrived and as it departed. The idea of such constant monitoring was partly intended to avoid adding value to defective units. More importantly, this system allowed for the quick identification and rectification of the sources of defects.

> 10 A lower percentage of faulty inputs may translate into a lower share of final products that must

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