Labor Effects of Multinational Firms Entry
by Isabela Manelici & Jose P. Vasquez
This project studies the impact of the entry of multinational corporations (MNCs) on worker outcomes using administrative data from Costa Rica. Policy makers from developed and developing countries alike and at all levels of government compete for the attraction of superstar firms (typically MNCs) through large economic incentives. In return, they expect an improvement in the labor market conditions of their jurisdiction. Despite the pervasiveness of such incentives, there is relatively little worker-level evidence on the impact of MNCs on the labor market and, in particular, on the distribution of labor earnings. Our project would contribute to the literature by providing evidence on who are the winners, the losers, and how the impacts of MNC entry are distributed across different worker groups (by education, occupation, initial position in the income distribution etc.).