The Twin Effects of Globalization - Evidence from a Sample of Indian Manufacturing Firms

Abstract

Employees of globalized firms face a riskier menu of labor market outcomes. They face a more uncertain stream of earnings and riskier employment prospects. However, they may also have stronger incentives to train and upgrade their skills and/or may benefit from more rapid careers. Hence, the costs of uncertainty and the benefits of skill upgrading associated with globalization may be twin to each other. We provide statistical evidence of this so far neglected trade-off for a sample of Indian manufacturing firms.

Keywords: globalization, uncertainty, training, labor markets, India

JEL Classification: F10, F16, J30, J31, O53