Domestic Employment

Elizabeth Weber Handwerker, Mina M. Kim, and Lowell Mason The Bureau of Economic Analysis (BEA) collects data on multinational companies based in the United States—firms that have full or partial ownership of affiliate companies in foreign countries. However, BEA data offer little detail on the characteristics of these firms’ U.S. employment. Identifying such firms in BLS data can show the geographic, occupation, and wage distributions of their employees in the United States. The popular media sometimes describe U.S. companies that make investments in companies overseas as “exporting good jobs,” but there is little evidence on the domestic employment characteristics of these firms, either before or after their overseas investments have taken place. Typically, firms that own at least a 10-percent interest in a foreign company are described as being engaged in foreign direct investment.1 In the economics literature, such companies have been shown to be systematically different from firms that focus on the domestic market.2 In particular, firms with foreign affiliates tend to be larger and more productive than firms that have no foreign affiliates, but that sell their products internationally.3 Exporting firms in turn tend to be larger and more productive than firms that sell their products only on the domestic market.4 However, aside from establishing that the firms engaged in foreign direct investment tend to be large employers that pay higher wages, the literature has uncovered very little about the geographic, occupation, or wage distributions of employment Domestic employment in U.S.-based multinational companies