We analyze the joint influence of migration inflows and outward FDI on wage bargaining. Labor migration and offshoring supported by FDI affect wage deals by changing the outside options of workers and firms. Unemployed workers may find alternative jobs either in the legal or in the illegal labor markets. Wages in this latter case are highly affected by migrants crowding this segment more than any other market. Firms may have the option of moving partly or entirely production to foreign low cost countries. We theoretically design a wage curve reflecting cross-border labor and capital mobility and estimate it on panel data for 13 European countries over the period 1995-2013. Our theoretical predictions of a joint negative effect on wages of FDI outflows and labor migration inflows are confirmed with some novel results.
International Factor Mobility, Wages and Prices / Rossini, Gianpaolo. - In: REVIEW OF DEVELOPMENT ECONOMICS. - ISSN 1363-6669. - STAMPA. - 19:3(2015), pp. 683-694. [10.1111/rode.12159]
International Factor Mobility, Wages and Prices
ROSSINI, GIANPAOLO
2015
Abstract
We analyze the joint influence of migration inflows and outward FDI on wage bargaining. Labor migration and offshoring supported by FDI affect wage deals by changing the outside options of workers and firms. Unemployed workers may find alternative jobs either in the legal or in the illegal labor markets. Wages in this latter case are highly affected by migrants crowding this segment more than any other market. Firms may have the option of moving partly or entirely production to foreign low cost countries. We theoretically design a wage curve reflecting cross-border labor and capital mobility and estimate it on panel data for 13 European countries over the period 1995-2013. Our theoretical predictions of a joint negative effect on wages of FDI outflows and labor migration inflows are confirmed with some novel results.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
