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Foreign Direct Investment, Wage Inequality, and Skilled Labor Demand in EU Accession Countries

Giovanni Bruno (), Rosario Crino () and Anna M. Falzoni
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Anna M. Falzoni: CESPRI, Università Bocconi

No 154, KITeS Working Papers from KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy

Abstract: During the 1990s Poland, Hungary and the Czech Republic have experienced rapid in-creases in wage inequality between skilled and unskilled workers and received the largest FDI inflow in Central and Eastern Europe. Using non-parametric and parametric approaches, this paper analyzes whether FDI has contributed to the raise in earning inequality and to the change in the skill composition of labor demand in the three countries. Our results suggest that, although FDI has not worsened wage inequality by favoring labor demand shifts, it has contributed to raising the skill-premium through the active role played by multinational firms in the transition-induced restructuring process which has resulted in a less compressed wage structure.

Keywords: Foreign direct investment; Labor demand; Wage inequality. (search for similar items in EconPapers)
JEL-codes: F16 F23 J23 J31 (search for similar items in EconPapers)
Date: 2004-02, Revised 2004-02
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Related works:
Working Paper: Foreign Direct Investment, Wage Inequality, and Skilled Labor Demand in EU Accession Countries (2005) Downloads
Working Paper: Foreign Direct Investment, Wage Inequality, and Skilled Labor Demand in EU Accession Countries (2004) Downloads
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