“Global Engagement and the Occupational Structure of Firms” by Susan Zhu
Tuesday, 23 May 2017 | 4:30pm - 6pm
Michigan State University
Global engagement can impact firm organization and the occupations firms need. We use a simple task-based model of the firm's choice of occupational inputs to examine how that choice varies with global engagement. We reveal a robust and causal relationship between global engagement and the skill mix of occupations within firms, using Swedish matched employer-employee data that link firms and the labor force for 1997-2005. Taking an instrumental variable approach, we find that increased export shares (driven by higher world import demand) skew the labor mix more toward high-skill occupations. We also find similar changes when firms begin to export or become multinational. Our results suggest that global engagement may incentivize firms to acquire more skilled labor to undertake complex tasks embodied in multinational and export activities.