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The Twin Effects of Globalization

Employees of"globalized"firms face a riskier, but potentially more rewarding, menu of labor market outcomes. The authors document this neglected tradeoff of globalization for a sample of Indian manufacturing firms. On the one hand, the employees of firms subject to foreign competition face a more uncertain stream of earnings and riskier employment prospects. On the other hand, they enjoy a more rapid career growth and have more opportunities to train and upgrade their skills. The negative uncertainty costs and the positive incentive effects of globalization are thus twin to each other. Concentrating on just one side of the coin gives a misleading picture of globalization.

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Paper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number 483.

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Date of creation: 2003
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Handle: RePEc:bol:bodewp:483
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