CELE researchers present at the Nordic Summer Institute in Labor Economics
Ragnhild Balsvik and Aline Bütikofer are presenting at the 12th Nordic Summer Institute in Labor Economics in Aarhus, Denmark, June 6-7 2017.
Ragnhild Balsvik presents her paper "Rent Sharing with Footloose Production: Foreign Ownership, Unions and Wages"(joint with Morten Sæthre)
We present a bargaining model of wage setting that predicts that foreign acquisitions might hurt the bargaining outcome of powerful unions by giving the firm a credible threat to shift production abroad. We test this prediction with matched employer–employee data that include plant-level information on union density. In particular, we use a differences-in-differences approach to compare the change in wages after an acquisition in plants with high and low union density. Foreign acquisitions are associated with significantly lower wages for the group of plants with high union density compared with the group of plants with low union density, and the estimated effect is in the range of 2–7%. A matching estimator gives similar results.
Aline Bütikofer presents her paper "Natural Resource Booms and Intergenerational Mobility" (joint with Antonio Dalla-Zuanna and Kjell G. Salvanes)
Do large economic shocks increase intergenerational earnings mobility by creating new economic opportunities, or do they instead reduce mobility by reinforcing the links between generations? To answer this question, we estimate how the Norwegian oil boom starting in the 1970s affected intergenerational mobility in local labor markets that were most affected by the growing oil industry. We find that this resource shock increased intergenerational mobility for cohorts starting their professional career in the beginning of the oil boom. These findings are not driven by pre-existing local-level differences in intergenerational mobility and persist for cohorts entering the labor market a decade into the oil boom. The change in intergenerational mobility is mostly driven by upward mobility and an increase of lower earnings in oil boom affected local labor markets. Neither geographic differences in human capital investment nor an increase in returns to education are the key mechanisms explaining our results. These geographic differences in intergenerational mobility do, however, not persist for the third generation.