Across-Country Wage Compression in Multinationals

Jonas Hjort, Xuan Li and Heather Sarsons

No 14465, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Many employers link wages at establishments outside of the home region to the level at headquarters. We show this using new data on 1,213 multinationals' establishments across the world and linked employee-level data on their establishments in Brazil. Headquarters wage changes arising from minimum wage and exchange rate shocks are partially transmitted to workers employed in the same position abroad. Wage change transmission appears to be direct and results from firm-wide wage-setting procedures rather than associated technology or employment changes. "Anchored: wage-setting is associated with particular headquarter country characteristics.

JEL-codes: F23 J01 J3 J31 (search for similar items in EconPapers)
Date: 2020-03
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Citations: View citations in EconPapers (26)

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Working Paper: Across-Country Wage Compression in Multinationals (2020)
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