Dorieann Fitzgerald: The Impact of Multinationals Along the Job Ladder

The Moynihan Institute’s program for Trade, Development, and Political Economy presents a talk by Doireann Fitzgerald, senior research economist, Federal Reserve Bank of Minneapolis.

Multinational affiliates are more productive than domestic firms, so how do they affect a host country through the labor market? We use data for Norway to show that the labor market is characterized by a job ladder, with multinationals on the upper rungs. We calibrate a general equilibrium job ladder model with endogenous multinational entry to match the Norwegian data.

In a counterfactual where multinationals face an infinite entry cost, payments to labor fall and profits of domestic firms rise, but the impact is heterogeneous. Competition for workers increases low down on the job ladder, while it decreases high up.

Doireann Fitzgerald joined the Federal Reserve Bank of Minneapolis as a senior economist in 2013. She has also been an assistant professor at Stanford University and the University of California–Santa Cruz. Doireann received a B.A. and M.A. in economics from University College Dublin and a Ph.D. in economics from Harvard University. She has been a visiting assistant professor at Harvard (2005–6) and a fellow in the International Economics Section at Princeton University (2010–11). Her work has appeared in the Journal of International Economics, the Journal of Monetary Economics, and the American Economic Review. Her main area of interest is international economics.