Browsing by Subject "Skill premium"

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Open Access
Labor market effects of knowledge spillovers
(ODTÜ İİBF, 2010) Bayraktar-Sağlam, B.; Sayek, Selin
This paper studies the diffusion of technology that occurs from Multinational Enterprises to domestic firms via worker mobility. It concentrates on the wage and unemployment implications of diffusion of knowledge through labor mobility in the local labor market. We construct a heterogeneous search and matching model where the labor mobility is restricted by the existence of binding contracts. Findings of the model reveal that knowledge spillovers through the movement of workers from foreign to local firm lower the firm premium and the skill premium. Further results indicate that technological progress raising the productivity gap between the foreign and the local film leads to an increase in the unemployment rate, the fim1 premium and the skill premium.
Open Access
Labor market implications of multinational enterprises
(2007) Sağlam, Bahar
In this dissertation, the labor market implications of increased foreign Firm activity in the local economy are studied by using a heterogeneous matching model framework. There are a number of unskilled and skilled job seekers, and a number of job vacancies posted by local and foreign firms. In this set up, where all workers can engage in on-the-job search, equilibrium conditions and Nash bargaining approach allows derivation of wages for different types of workers and Firms. Results suggest that wages are a weighted average of labor productivity and unemployment benefit, where the weight depends on the bargaining power of the workers, labor market tightness and the mass of local and foreign vacancies. Results suggest that levels of wages paid by the foreign Firm need not always be greater than that paid by the local Firm. In fact, the wage differential is found to depend on relative costs, skill endowment and the technological gap between local and foreign Firms. An increase in the foreign presence, measured as an increase in the extent of foreign Firm vacancy creation, can occur because of an exogenous change in cost of job creation- public policy, technological improvements and skill upgrading. In this context, depending on the cause of an increase in foreign presence we end up with differential relative wage effects. On the other hand, skill intensity of the foreign Firms and restrictions on labor mobility from foreign to local Firms play a crucial role in explaining wage differentials and unemployment.