The foreign firm wage premium in the Israeli tech sector

Noam Gruber

Journal of International Economics, 2024, vol. 152, issue C

Abstract: Foreign tech multinationals, which have entered Israel en masse in the past two decades, are known to use high wages to draw in the best talent. While paying higher wages no doubt contributes to the domestic economy, local tech firms have argued that the competition for talent inhibits their growth, and that foreign multinationals contribute less in terms of overall economic value compared to local firms. It is thus of great importance to estimate the foreign firm wage premium – by how much do foreign multinationals pay more for comparable talent? Using an extensive micro-level education data and exploiting worker movement and firm shutdowns/downsizing as an unbiased alternative to AKM methodology, this paper finds the foreign firm wage premium to be in the 3%–4% range, much less than previously estimated.

Keywords: FDI spillover effects; Foreign firm wage premium; Technological diffusion (search for similar items in EconPapers)
JEL-codes: F23 J3 O33 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022199624001442
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:152:y:2024:i:c:s0022199624001442

DOI: 10.1016/j.jinteco.2024.104017

Access Statistics for this article

Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and Rodríguez-Clare, Andrés

More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().