Offshoring of medium-skill jobs, polarization, and productivity effect: implications for wages and low-skill unemployment
"We examine the effects of endogenous offshoring on cost-efficiency, wages and unemployment in a task- assignment model with skill heterogeneity. Exact conditions for the following insights are derived. The distributional effect of offshoring (high-) low-skill-intensive tasks is similar to (uns...
| Main Author: | |
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| Institution: | ETUI-European Trade Union Institute |
| Format: | TEXT |
| Language: | English |
| Published: |
Munich
2015
MPRA |
| Subjects: | |
| Online Access: | https://www.labourline.org/KENTIKA-19114856124919320389-offshoring-of-medium-skill-job.htm |
| Summary: | "We examine the effects of endogenous offshoring on cost-efficiency, wages and unemployment in a task- assignment model with skill heterogeneity. Exact conditions for the following insights are derived. The distributional effect of offshoring (high-) low-skill-intensive tasks is similar to (unskilled-) skill-biased technology changes, while offshoring medium-skill-intensive tasks induces wage polarization. Offshoring improves cost-efficiency through international task reallocation and puts a downward pressure on all wages through domestic skill-task reallocation. If elasticities of task substitution are low (high), the downward pressure on wages in neighboring skill segments is low (high) with a net effect of higher (lower) wages and employment." |
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| Physical Description: | 52 p. Digital |