Teadusseminar "The Labor Market Effects of Multinational Entry" (Ignacio Marra de Artiñano)

Teadusseminar

11.03.2026 kell 14.00-15.00

Zoom

IGNACIO MARRA de ARTIÑANO (Université Libre de Bruxelles)

The Labor Market Effects of Multinational Entry

This paper studies how multinational entry affects labor markets, focusing on its distributional consequences. In 1995, Brazil eliminated constitutional restrictions on foreign investment. Within a decade, 700,000 workers joined multinational corporations, doubling their employment share. Using matched employer–employee records and sectoral variation in the reform, I find that workers switching to multinationals experienced large wage gains, while those remaining at domestic firms faced heterogeneous outcomes: college graduates saw modest wage increases, but less-educated workers experienced declines and higher informality. To quantify the aggregate impact of the reform, I develop and estimate a dynamic general equilibrium model with multinational production, labor market frictions, skill-biased technology, and informality. The reform raised output by 1% but widened inequality: college graduate wages rose 8%, while wages for workers without high school fell 1%. Multinational entry, while growth-enhancing, acted as a skill-biased labor market shock with significant distributional costs.