Working Paper: NBER ID: w4927
Authors: Robert E. Lipsey
Abstract: Foreign-owned establishments in the United States pay higher wages, on average, than domestically-owned establishments. The foreign-owned establishments tend to be in higher-wage industries and also to pay higher wages within industries. They tend to locate in lower-wage states, but to pay more than domestically-owned firms within industries within states. Wages in general and wages in domestically-owned establishments tend to be higher in states and industries in which foreign-owned establishments account for a larger proportion of employment. Foreign-owned establishments that were new in 1990, mostly takeovers, had lower than average wage levels in that year but larger increases between 1990 and 1991. Increases in sales per worker and average wages were larger where employment growth was lower, possibly an indication that lower-productivity, lower-wage workers were dropped by the new owners.
Keywords: foreign ownership; wages; U.S. labor market; compensation levels
JEL Codes: F23; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| foreign ownership (F23) | higher wage levels (J31) |
| industry composition (L89) | higher wage levels (J31) |
| foreign ownership in lower-wage states (F23) | higher wage levels (J31) |
| industry distribution (L81) | wage differential (J31) |
| residual wage differences (J31) | higher wage levels (J31) |