nep-mig New Economics Papers
on Economics of Human Migration
Issue of 2008‒07‒20
three papers chosen by
Yuji Tamura
Australian National University

  1. Wage Convergence and Inequality after Unification: (East) Germany in Transition By Gernandt, Johannes; Pfeiffer, Friedhelm
  2. Did History Breed Inequality? Colonial Factor Endowments and Modern Income Distribution By Matthew J. Baker; Christa N. Brunnschweiler; Erwin H. Bulte
  3. Sending Expatriates to Japan? Executive staffing practice patterns. By Ralf Bebenroth; Donghao Li

  1. By: Gernandt, Johannes; Pfeiffer, Friedhelm
    Abstract: This paper investigates the wage convergence between East German workers and their West German counterparts after reunification. Our research is based on a comparison of three groups of workers defined as stayers, migrants and commuters to West Germany, who lived in East Germany in 1989, with groups of West German statistical twin workers, all taken from the Socio-Economic Panel (SOEP). According to our findings, wage convergence for stayers is roughly 75 percent and for commuters 85 percent. Wages of migrants to West Germany equal the ones of their West German statistical twins. We conclude that labor markets in East and West Germany are still characterized by wage differences but that the degree of inequality in both regions converged.
    Keywords: Wage convergence, wage inequality, German unification, migration, commuting
    JEL: J30 J31 J61
    Date: 2008
  2. By: Matthew J. Baker (Hunter College, City University of New York); Christa N. Brunnschweiler (CER-ETH Center of Economic Research at ETH Zurich, Switzerland); Erwin H. Bulte (Development Economics Group, Wageningen University and Department of Economics, Tilburg University)
    Abstract: We explore the relation between historical population density in former colonies and modern income distribution. A theoretical model highlights the potentially opposing effects of native population density on incentives for colonists to conquer or settle in new territories. While an abundant supply of native labor is an “asset” that drives up land rents, it is also a “liability” that makes land acquisition by colonists more difficult and reduces returns to peacable migration. Conflicts over land, sowing the seeds for inequality by creating a landed élite living off rents, are especially likely to emerge for intermediate native population densities. Results are confirmed by detailed empirical tests highlighting the curvilinear relationship between native population density and modern income inequality. Finally, using population density as an instrument for inequality in the former colonies, we demonstrate that there is no causal relationship running from income distribution to economic growth.
    Keywords: inequality, growth, factor endowments, population density, conflict, colonization
    JEL: O15 N30 N50
    Date: 2008–06
  3. By: Ralf Bebenroth (Research Institute for Economics and Business Administration, Kobe University); Donghao Li (Graduate School of Business Administration, Kobe University)
    Abstract: Our empirical study provides the first insights of executive staffing practice patterns in foreign-owned multinational company (MNC) subsidiaries based in Japan. We explore determinants for parent country nationals (PCN) as top managing directors and - new in the International Human Resource Management (IHRM) literature - also the ratio of PCN found on the board (Ratio) and examine under which conditions they are prevalent in the subsidiaries. We sampled the full range of 3,241 foreign companies in Japan. For the PCN/Ratio, several of our hypotheses were relevant for the PCN and were tested to be positive. In regard to the ownership ratio of the subsidiaries, the PCN/Ratio is highly significant to 1%, supporting the theory that also for Japan high ownership matters when it comes to sending one's "own" people to the subsidiary abroad. In contrast to studies for other countries, however, the size of the subsidiary does not matter for Japan, at least when measured (like usually done) by the number of employees. Only if we measure size by capital does the PCN/Ratio prevalence become significant. The PCN/Ratio also becomes highly significant (by 1%) in countries with a high Power Distance and a high Uncertainty Avoidance. PCN sending behavior seems to be somehow a country-specific phenomenon. We, furthermore, show that it matters whether companies settle down in one of the two big centers in Japan (Kanto and Kansai), which cultural circumstances for PCN tend to be more similar than in other areas of Japan. In Kanto and Kansai there are statistically significant more PCN and, therefore, a higher PCN/Ratio than in other Japanese areas. In regard to MNCs, we show that smaller sized MNCs have a lower prevalence of PCN as their top managing director. These findings are in contrast to the International Human Resource Management literature. We put MNCs into two groups and show that MNCs with under 5000 employees have a lower prevalence of PCN as top managing directors (on average 28%). At the same time however, the PCN to the whole board (Ratio) is higher in these smaller MNCs (up to 10%). In other words, bigger companies seem to rely on their PCN as their top managing director in Japan. In contrast to this, in smaller companies, Japanese senior managers prevail as the top managing directors (HCN), although our research suggests that there are more PCN sent to the board of the bigger MNCs. Finally, we produce evidence that US subsidiaries in Japan have the lowest PCN/Ratio, with the PCN only counting for 22%, and the Ratio at 28%. In stark contrast, Asian countries have the highest PCN/Ratio in our sample, with Korea leading with PCN of 81% and a Ratio of 82%.
    Keywords: International Human Resource Management (IHRM), executive staffing practice patterns, Power Distance, Uncertainty Avoidance
    Date: 2006–10

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