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Paying More to Hire the Best? Foreign Firms, Wages and Worker Mobility

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  • Martins, Pedro S.

    (Universidade Nova de Lisboa)

Abstract

In the context of the debate on the labour-market consequences of globalisation, we examine worker mobility in order to identify the wage differences between foreign and domestic firms. Using matched employer-employee panel data for Portugal, we consider virtually all spells of interfirm mobility over a period of ten years. We find that foreign firms offer significantly more generous wage policies, although there is also a (smaller) selection effect. The results are robust to the consideration of wage growth differences, the case of displaced workers and different subsets of workers.

Suggested Citation

  • Martins, Pedro S., 2008. "Paying More to Hire the Best? Foreign Firms, Wages and Worker Mobility," IZA Discussion Papers 3607, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3607
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    More about this item

    Keywords

    worker displacement; foreign direct investment; wage growth;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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