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

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  • Eren, Ozlem
  • Peoples, James

Abstract

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.

Suggested Citation

  • Eren, Ozlem & Peoples, James, 2009. "FDI activity and worker compensation: evidence from U.S. non-manufacturing industries," MPRA Paper 26416, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:26416
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    More about this item

    Keywords

    FDI; labor; educational attainment; compensation; wage; non-manufacturing; union; healthcare; pension;
    All these keywords.

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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