Multinational firms and local workers

This thesis consists of three self-contained studies that examine the impact of multinational firms (MNEs) on the wage and career trajectories of local workers within the universal matched employer-employee data of the Netherlands. Chapter 2 demonstrates that the MNE wage gap following foreign acquisitions of domestic firms is largely explained by firm-level factors, rather than workforce composition. Chapter 3 reveals that wage premia associated with MNE careers accrue gradually over a worker’s MNE tenure and are highly transferable to future employers. In line with a model where MNEs leverage their value for careers, MNEs recruit more junior staff, pay lower entry wages, and apply stricter selection criteria for senior positions than domestic firms. Chapter 4 finds that automation in MNEs generally increases wages but leads to high separation rates, whereas in domestic firms, it typically results in wage declines and lower separations. Overall, this thesis demonstrates that while MNE employment raises local wages and fosters skill development, it can also lead to greater job instability and wage inequality.