Job Market Paper

How do multinational firms affect domestic firms and workers? 

Data access funded by "A Sustainable Future" (ASF): Project description

Link to GitHub: https://github.com/lisamati/JM/blob/main/LisaTimm_JMP_MNE.pdf

Abstract:
This paper investigates how the presence of multinational enterprises (MNEs) in a local labor market affects wages and employment in domestic firms. Specifically, I focus on the (local) labor demand by MNEs and I use the variation of the share of migrants hired by MNEs to investigate to what extent labour demand or spillovers drive potential wage effects. To circumvent endogeneity of MNE location choice, I use the variation of industry structures across local labor markets to construct a shift-share variable. Using administrative data of the universe of workers and firms from the Netherlands, I find a positive, sizeable and statistically significant effect of MNE presence on wages for newly hired workers in domestic firms. This effect is stronger in local labor markets where MNEs hire relatively few migrants (relatively more domestic workers), suggesting that labor demand drives the positive effect of MNEs on domestic wages. 

Publication

Tax incentives for migrants with mid-level earnings: evidence from the Netherlands

(joint with M. Giuliodori and P. Muller)
American Economic Journal: Applied Economics (forthcoming)
https://www.aeaweb.org/articles?id=10.1257/app.20230438&&from=f

Abstract: 

We examine how income taxes affect international mobility and wages. We study a Dutch preferential tax scheme for migrants, which introduced an income threshold for eligibility in 2012. The threshold is low relative to similar schemes in other countries, thereby offering eligibility to migrants with mid-level earnings. We find that migration more than doubles closely above the income threshold, while migration below the threshold remains unchanged. These effects appear to be driven by additional migration, while wage bargaining responses are limited. We estimate a migration elasticity ranging between 1.6-2.7, somewhat higher than most studies on high-income migrants have found.

Keywords: international migration, income tax benefits, wage bargaining, bunching.

Full paper: Tinbergen Discussion Paper No. 22-068/V, IZA Working Paper No. 15582

News: Hervorming expatregeling heeft tot aanzienlijke toename migranten geleid (ESB, in Dutch)
TV: EenVandaag (Dutch)

Work in Progress: 

High-earning migrants and housing markets (joint with Flavia Paoloni)

Abstract:
We investigate how high- and low-income immigrants affect house prices in neighborhoods in the Netherlands. To circumvent the endogeneity of immigrant location choice, we use a shift-share instrumental variable strategy, exploiting past settlement patterns of immigrants. We use individual administrative data linked to residential property values and sale prices between 2006 and 2022. Results show an average positive effect of 0.32 percentage points from an inflow of high-income immigrants on house price growth in the short run, while an increase in low-income immigrants decreases year-on-year growth of house values by 0.14 percentage points. The changes are mainly driven by postcodes in less urban municipalities. At an average change in the immigrant share (0.24\%), property prices grow around 1 percentage point less for all types of immigrants. This medium-turn effect is potentially mediated by native outflow from areas that experience an increase in the immigrant share.

Data access funded by "A Sustainable Future" (ASF): Project description 

Gender gap in wage bargaining (joint with Mark van der Meijden, Paul Muller and Massimo Giuliodori)

Abstract:
This paper studies whether gender differences in wage bargaining contribute to the gender wage gap. We exploit the expiration of the Dutch 30\%-rule, which causes a sharp decline in net income for eligible migrant workers and creates a strong incentive to renegotiate pay within ongoing jobs. Using administrative data, we find that wages increase after expiration, but that the increase is significantly larger for men than for women: men’s hourly wages rise by about 0.6 to 1.5 log points more, with the gap building over the months after expiration. An Oaxaca-Blinder decomposition shows that this difference is largely explained by gender differences in initial wage levels, household circumstances linked to mobility constraints, and industry composition, while the residual unexplained component is small. The results provide real-world evidence that wage bargaining is an important channel through which gender pay gaps can widen, and that this channel operates in interaction with broader inequalities in labor market position and mobility.