The Role of Multinational Firms in the Wage-Gap Debate |
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Authors: | James R Markusen & Anthony J Venables |
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Institution: | University of Colorado, Boulder, CO 80309, USA, and NBER-CEPR,;London School of Economics, Houghton Street, London WC2A 2AE, UK, and CEPR |
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Abstract: | The observation of an increase in the ratio of skilled to unskilled wages in the high-income countries and in some cases in low/middle-income countries has led to considerable discussion and controversy as to its cause. Virtually none of the analyses have considered a role for multinational investment in explaining the wage-gap phenomenon. This paper adapts the authors' earlier work to consider what role multinationals might play in factor markets. It identifies circumstances under which investment liberalization is likely to raise the wage gap in both the skilled-labor abundant and the unskilled-labor abundant country. |
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