Journal
JOURNAL OF DEVELOPMENT ECONOMICS
Volume 73, Issue 1, Pages 415-422Publisher
ELSEVIER
DOI: 10.1016/j.jdeveco.2002.12.004
Keywords
FDI; wages; Indonesia
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This paper examines whether the higher wages paid by foreign-owned manufacturing plants than by domestically owned plants, typical of most countries, represents a higher price for labor. That is, does it reflect a higher price for workers of a given quality, as represented by the level of education? We then ask whether foreign-owned plants pay a higher price for labor given the characteristics of the plants. Foreign-owned firms are found to pay a higher price for labor of a given educational level than domestically owned ones. Only a part of the difference is associated with plant characteristics, rather than ownership. (C) 2003 Published by Elsevier B.V.
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