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FDI activity and worker compensation: evidence from U.S. non-manufacturing industries

  • Eren, Ozlem
  • Peoples, James

This study examines worker compensation effects of foreign direct investment (FDI) activity in US non-manufacturing industry sectors. A clustered standard error correction is used when estimating wage and non-wage compensation equations, with special attention given to FDI’s effect by worker educational attainment and union status. Wage findings reveal that FDI activity is associated with a wage premium for highly educated non-union workers and with union rent erosion for all educational-gender groups excluding females with low educational attainment. Non-wage compensation analysis reveals FDI activity is generally associated with significantly higher probabilities of workers receiving employer financed non-wage compensation for union and non-union workers regardless of their level of educational attainment.

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File URL: http://mpra.ub.uni-muenchen.de/26416/1/MPRA_paper_26416.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 26416.

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Date of creation: Dec 2009
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Handle: RePEc:pra:mprapa:26416
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  1. Aitken, B. & Harrison, A. & Lipsey, R.E., 1995. "Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela, and the United States," Papers 95-21, Columbia - Graduate School of Business.
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  17. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
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