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The Impact of Multinationals Along the Job Ladder

Ragnhild Balsvik, Doireann Fitzgerald and Stephanie Haller

No 651, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: Multinational affiliates are more productive than domestic firms, so how do they affect a host country through the labor market? We use data for Norway to show that the labor market is characterized by a job ladder, with multinationals on the upper rungs. We calibrate a general equilibrium job ladder model with endogenous multinational entry to the Norwegian data. In a counterfactual where multinationals face an infinite entry cost, payments to labor fall and profits of domestic firms rise, but the impact is heterogeneous. Competition for workers increases low down on the job ladder, while it decreases high up.

Keywords: Job ladder; Multinationals; Labor market (search for similar items in EconPapers)
JEL-codes: E24 F23 F66 J63 J64 (search for similar items in EconPapers)
Date: 2023-10-12
New Economics Papers: this item is included in nep-com, nep-int and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmsr:97205

DOI: 10.21034/sr.651

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