Multinational Spillovers through Worker Turnover

Labor turnover is a commonly-cited mechanism for the transmission of spillovers from multinational to domestic firms, but until now there has been little direct evidence for this mechanism. Using a novel matched establishment-worker database from Brazil, I present evidence consistent with the existence of positive multinational spillovers through worker mobility in Brazil. The paper explores where spillovers occur and how they are absorbed. The main results suggest that the magnitude of wage spillovers from multinational establishments depends on the sector and worker under consid-eration. The results provide support for the hypothesis that higher-skilled former multinational-establishment workers are better able to convey information and higher-skilled incumbent domestic workers are better able to absorb information. Information is best transferred between similarly-skilled groups of high-skilled workers and from higher skilled former multinational-establishment workers to lower-skilled incumbent domestic workers. The results are robust to various model specifications, including worker and establishment fixed effects. ∗I am grateful to Marc-Andreas Muendler and James E. Rauch for their guidance and support throughout this research, and to Eli Berman, Gordon H. Hanson, and Craig McIntosh for helpful discussions. I also thank seminar participants at the UCSD Department of Economics, Applied Lunch Seminar and the join