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Rising Tides, Rocking Boats : Foreign Direct Investment and Globalization's "Insecure Winners" in Eastern Europe

  • Author(s): Beesley, Celeste Elizabeth
  • et al.
Abstract

This dissertation introduces the interests of globalization's "insecure winners"--those who have greater opportunity but face greater economic uncertainty as a result of globalization--into the discussion of the globalization-welfare state nexus. This dissertation examines the effects Foreign Direct Investment (FDI) (in the form of employment in a multinational corporation) on individuals' perceived economic security and their preferences for welfare state programs, such as unemployment insurance, poverty assistance, disability assistance, and pension programs. Though FDI has benefited these workers by creating jobs, these workers may have a greater fear of job loss due to higher elasticity of demand for local labor among multinational corporations. In low- and middle-income countries, job loss can be a more costly outcome for them relative to other workers. The advantages of a job in a multinational (foreign wage premium, greater opportunity for advancement, etc.) decrease the probability that they will be able to find a comparable job, should they lose their present position. As a result, they favor more government-sponsored insurance in the form of welfare state policies. Using original survey data from matched populations in the Ukraine, as well as cross-national data and a most-similar case study of firms, this dissertation shows that workers at multinational corporations report higher pay and job satisfaction than workers at domestic firms. However, they also perceive higher risks of job loss and feel that, in the event of job loss, their job prospects are inferior to their current employment. As a result, they express preferences for more welfare-state protections, in spite of their privileged status. However, they do not oppose globalization. These findings indicate that the "winner"- "loser" dichotomy, often used to discuss the politics of globalization (and particularly the globalization-induced demand for social protections), excludes important constituencies whose political preferences are strongly influenced by both advantage and insecurity

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