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PAYING MORE TO HIRE THE BEST? FOREIGN FIRMS, WAGES, AND WORKER MOBILITY
Author(s) -
MARTINS PEDRO S.
Publication year - 2011
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2010.00301.x
Subject(s) - wage , labour economics , context (archaeology) , economics , globalization , panel data , wage growth , labor mobility , identification (biology) , order (exchange) , market economy , paleontology , botany , finance , econometrics , biology
In the context of the debate on the labor‐market consequences of globalization, we adopt an original approach toward the identification of the wage differences between foreign and domestic firms: worker mobility. Using matched employer‐employee panel data for Portugal, we consider virtually all spells of interfirm mobility over a period of 10 yr. 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 displaced workers, wage growth differences in the new firms, and different subsets of workers. ( JEL J31, J63, F23)