TY  - JOUR
AU  - Scheve,Kenneth
AU  - Slaughter,Matthew
TI  - Economic Insecurity and the Globalization of Production
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9339
PY  - 2002
Y2  - November 2002
UR  - http://www.nber.org/papers/w9339
L1  - http://www.nber.org/papers/w9339.pdf
N1  - Author contact info:
Kenneth F.. Scheve
Department of Political Science
Yale University
New Haven, CT  06520-8301
E-Mail: kenneth.scheve@yale.edu

Matthew J. Slaughter
Tuck School of Business
Dartmouth College
100 Tuck Hall
Hanover, NH 03755
Tel: 603/646-2939
Fax: 603/646-0995
E-Mail: matthew.j.slaughter@dartmouth.edu
AB  - A common claim in debates about globalization is that economic integration increases worker insecurity. Although this idea is central to both political and academic debates about international economic integration, the theoretical basis of the claim is often not clear. There is also no empirical research that has directly tested the relationship. In this paper, we argue that economic insecurity among workers may be related to riskier employment and/or wage outcomes, and that foreign direct investment may be a key factor contributing to this increased risk by making labor demands more elastic. We present new empirical evidence, based on the analysis of panel data from Great Britain collected from 1991-1999, that FDI activity in the industries in which individuals work is positively correlated with individual perceptions of economic insecurity. This relationship holds in yearly cross-sections, in a panel accounting for individual-specific effects, and in a dynamic panel model also accounting for individual-specific effects.
ER  -