Irish Firms Is Linked to Both Family Labour and Outside Piece Workers, No Such Relationship Is Found for Foreign Firms
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Access to Electronic Thesis Author: Damien Cassells Thesis title: The Roles of Foreign Labour and Foreign Firms in the Irish Economy: An Empirical Analysis Qualification: PhD This electronic thesis is protected by the Copyright, Designs and Patents Act 1988. No reproduction is permitted without consent of the author. It is also protected by the Creative Commons Licence allowing Attributions-Non-commercial-No derivatives. If this electronic thesis has been edited by the author it will be indicated as such on the title page and in the text. The Roles of Foreign Labour and Foreign Firms in the Irish Economy: An Empirical Analysis Damien Cassells A Dissertation Submitted in Fulfilment of the Requirements for the Degree of Doctor of Philosophy in Economics Thesis supervisors: Professor Sarah Brown Professor Karl Taylor Department of Economics University of Sheffield July 2010 Declaration I hereby certify that this material is entirely my own work and has not been taken from the work of others save to the extent that such work has been cited and acknowledged within the text of my work. It has not been submitted as an exercise for a degree at this or any other University. I agree that the library may lend or copy the thesis upon request. Signed: _______________________ ID Number: ___________________ Date: _________________________ 2 Abstract The focus of this thesis is upon the role of foreign labour and foreign firms in the Irish economy. Chapter 1 presents an introduction to the overall thesis, while the historical context for the Irish economy is presented in Chapter 2. The empirical analysis presented in Chapter 3 explains occupational attainment in Ireland. With respect to occupational outcomes for foreign and indigenous workers, the Irish workers were found to be likely to occupy the professional posts. Foreign born workers who had resided in Ireland for less than ten years were less likely to find employment in the higher skilled occupations, while those workers who had resided for more than ten years in Ireland were likely to working in associate professional posts. Chapter 4 utilises a Mincerian wage equation to examine potential earnings differentials between Irish and non-Irish workers in the Irish labour market. Random effects estimates are analysed. The findings suggest that Irish workers earned less per hour than non-Irish workers, while non-Irish workers who took up Irish citizenship received higher levels of hourly pay then those non-Irish workers without Irish citizenship. Chapter 5 presents a production function analysis of firms in the Irish manufacturing sector. Using a Cobb-Douglas specification, firm nationality is found to have no impact upon output in the Irish manufacturing sector, while the output of Irish firms is linked to both family labour and outside piece workers, no such relationship is found for foreign firms. 3 Dedication This thesis is dedicated both to the memory of my Grandmother, Margaret Dowling, and to the constant presence of my Mother, Patricia Cassells. A sincere and loving thank you to both of you for the years of love and support. 4 Acknowledgements The following people deserve much thanks and praise for aiding the completion of this thesis. Firstly, to both of my supervisors, Professor Sarah Brown and Professor Karl Taylor, a sincere thank you for the huge amount of time, effort and concern you demonstrated towards me as a human being and indeed to the project itself. Without your professionalism, encouragement and talents this thesis would not have been completed. Thank you. To the staff at the Central Statistics Office for accommodating me during my studies there and for allowing me to access to the restricted Census of Industrial Production data on site. Without this access Chapter 5 could not have been completed. Thank you. To my parents, Patrick and Patricia, my brothers, Peter and Stephen and to my sister- in-law, Anita, thank you for the love and encouragement and support throughout my life and in particular for the duration of my PhD studies. Without your support and sacrifices throughout my life it would not have been possible for me to take my education as far as I have. Thank you. Finally thank you to two special friends, Enda Carr of Maynooth and Antonia Colom of Majorca, thank you for the love shown, particularly in 2009. Thank you. 5 Table of Contents DECLARATION ---------------------------------------------------------------------------------------------------------------------- 2 ABSTRACT --------------------------------------------------------------------------------------------------------------------------- 3 DEDICATION ------------------------------------------------------------------------------------------------------------------------ 4 ACKNOWLEDGEMENTS ---------------------------------------------------------------------------------------------------------- 5 TABLE OF CONTENTS ------------------------------------------------------------------------------------------------------------- 6 LIST OF TABLES --------------------------------------------------------------------------------------------------------------------- 8 LIST OF FIGURES ----------------------------------------------------------------------------------------------------------------- 11 ABBREVIATIONS ----------------------------------------------------------------------------------------------------------------- 13 CHAPTER 1: INTRODUCTION ------------------------------------------------------------------------------------------------- 14 CHAPTER 2: AN OVERVIEW OF IRISH ECONOMIC HISTORY, OUTPUT AND EMPLOYMENT ---------------- 20 2.1 INTRODUCTION -------------------------------------------------------------------------------------------------------------- 20 2.2 IRELAND AND ECONOMIC GROWTH --------------------------------------------------------------------------------------- 20 2.3 OUTPUT AND THE LABOUR MARKET IN IRELAND ------------------------------------------------------------------------- 32 2.4 CONCLUSION ---------------------------------------------------------------------------------------------------------------- 38 CHAPTER 3: OCCUPATIONAL ATTAINMENT AND NATIONALITY IN IRELAND ---------------------------------- 40 3.1 INTRODUCTION -------------------------------------------------------------------------------------------------------------- 40 3.2 LITERATURE REVIEW -------------------------------------------------------------------------------------------------------- 45 3.3 METHODOLOGY AND DATA ------------------------------------------------------------------------------------------------ 58 3.3.1 The Multinomial Logit Model --------------------------------------------------------------------------------- 58 3.3.2 Data Description -------------------------------------------------------------------------------------------------- 63 3.4 RESULTS --------------------------------------------------------------------------------------------------------------------- 71 3.4.1 Multinomial Logit Estimates for All Workers for Model 1 --------------------------------------------- 72 3.4.2 Multinomial Logit Estimates for All Workers for Model 2 --------------------------------------------- 79 3.4.3 Multinomial Logit Estimates for All Workers for Model 3 --------------------------------------------- 80 3.4.4 Estimates for the Manufacturing Workers ---------------------------------------------------------------- 81 3.4.5 Estimates for the Male Workers ------------------------------------------------------------------------------ 84 3.4.6 Estimates for the Female Workers --------------------------------------------------------------------------- 85 3.5 CONCLUSION ---------------------------------------------------------------------------------------------------------------- 88 APPENDIX TO CHAPTER 3: RESULTS AND VARIABLE DEFINITIONS ------------------------------------------------------------ 95 CHAPTER 4: WAGES AND NATIONALITY IN IRELAND --------------------------------------------------------------- 122 4.1 INTRODUCTION ------------------------------------------------------------------------------------------------------------ 122 4.2 LITERATURE REVIEW ------------------------------------------------------------------------------------------------------ 125 4.3 METHODOLOGY AND DATA ---------------------------------------------------------------------------------------------- 137 4.3.1 The Random Effects Model ---------------------------------------------------------------------------------- 138 4.3.2 The Mincerian Wage Equation ----------------------------------------------------------------------------- 139 4.3.3 The Wage Equation and the Oaxaca Decomposition ------------------------------------------------- 141 4.3.4 Sample Selection Bias and the Inverse Mills Ratio ----------------------------------------------------- 142 6 4.3.5 Data Description ------------------------------------------------------------------------------------------------ 144 4.4 RESULTS ------------------------------------------------------------------------------------------------------------------- 150 4.4.1 Random Effects Estimates for All Workers -------------------------------------------------------------- 151 4.4.2 Random Effects Estimates for Male Workers Only ---------------------------------------------------- 157 4.4.3 Random Effects Estimates for Female Workers Only ------------------------------------------------- 159 4.4.4 Estimates for the Oaxaca Decompositions --------------------------------------------------------------