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Foreign Direct Investment, Wage Inequality, and Skilled Labor Demand in EU Accession Countries

  • Giovanni S.F. Bruno

    (Bocconi University, Milan)

  • Rosario Crinò

    (CESPRI-Bocconi University)

  • Anna M. Falzoni

    (University of Bergamo; CESPRI-Bocconi University)

During the 1990s Poland, Hungary and the Czech Republic have experienced rapid increases in wage inequality between skilled and unskilled workers and received the largest FDI inflow in Central and Eastern Europe. This paper analyzes whether FDI has contributed to the raise in earning inequality via a change in the skill composition of labor demand in the three countries. While we find that in Hungary and the Czech Republic FDI exerts a positive direct impact on the skill-premium, in none of the countries considered FDI has worsened wage inequality by favoring labor demand shifts.

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Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number 188.

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Date of creation: 01 Oct 2004
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Handle: RePEc:csl:devewp:188
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