Foreign Firms, Domestic Wages
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Foreign Firms, Domestic Wages. / Malchow-Møller, Nikolaj; Schjerning, Bertel; R. Markusen, James.
In: Scandinavian Journal of Economics, Vol. 115, No. 2, 04.2013, p. 292-325.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - Foreign Firms, Domestic Wages
AU - Malchow-Møller, Nikolaj
AU - Schjerning, Bertel
AU - R. Markusen, James
N1 - JEL Classification: F2;F16;F23
PY - 2013/4
Y1 - 2013/4
N2 - Three types of theories have been used to explain the wage premium in foreign firms: the theories of heterogeneous workers, heterogeneous learning, and heterogeneous firms. We set up a model that explicitly encompasses two of these theories, and that can illustrate the third. This unifying framework allows us to rigorously compare the predictions of the different theories. Thus, it is a useful tool for interpreting new and existing empirical evidence. We illustrate the usefulness of the model on matched employer−employee data, and we find considerable support for all three theories. In particular, the theory of heterogeneous workers can explain up to 75 percent of the premium.
AB - Three types of theories have been used to explain the wage premium in foreign firms: the theories of heterogeneous workers, heterogeneous learning, and heterogeneous firms. We set up a model that explicitly encompasses two of these theories, and that can illustrate the third. This unifying framework allows us to rigorously compare the predictions of the different theories. Thus, it is a useful tool for interpreting new and existing empirical evidence. We illustrate the usefulness of the model on matched employer−employee data, and we find considerable support for all three theories. In particular, the theory of heterogeneous workers can explain up to 75 percent of the premium.
KW - Faculty of Social Sciences
KW - Heterogeneous firms
KW - heterogeneous workers
KW - learning
KW - wage premium
U2 - 10.1111/sjoe.12001
DO - 10.1111/sjoe.12001
M3 - Journal article
VL - 115
SP - 292
EP - 325
JO - Scandinavian Journal of Economics
JF - Scandinavian Journal of Economics
SN - 0347-0520
IS - 2
ER -
ID: 37955800