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A model of wage and employment effects of service offshoring

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  • Martin Tobal

Abstract

This paper develops a two‐sector model of trade in goods and intermediate tasks that differ in tradability and skill intensity. A skill‐abundant country with high productivity is shown to offshore more unskilled tasks than skilled tasks, without relying on a particular correlation structure between tradability and skill intensity. With putty‐clay technology that allows retraining in the long run, transition from the non‐offshoring to the offshoring equilibrium generates wage and employment effects that switch from negative to positive as tradability declines, with the switches occurring at a higher degree of tradability for skilled tasks. This is consistent with the empirical literature. Un modèle des effets de la délocalisation des services sur les salaires et l’emploi. Ce texte développe un modèle à deux secteurs de commerce international de biens et de tâches intermédiaires qui diffèrent tant par leur cessibilité que par l’intensité des qualifications requises. On montre qu’un pays qui a une abondance de qualifications et une forte productivité délocalise les tâches réclamant moins de qualifications sans s’en remettre à une structure de corrélation particulière entre cessibilité et intensité des qualifications. Avec une technologie de type putty‐clay qui permet la réadaptation du travail à long terme, la transition d’un équilibre sans délocalisation à un équilibre avec délocalisation engendre des effets de salaires et d’emplois qui passent de négatifs à positifs à proportion que la cessibilité décline, avec des réarrangements pouvant se passer avec plus grande cessibilité pour des tâches à plus forte intensité en qualifications. Voilà qui est cohérent avec la littérature empirique.

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  • Martin Tobal, 2019. "A model of wage and employment effects of service offshoring," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(1), pages 303-338, February.
  • Handle: RePEc:wly:canjec:v:52:y:2019:i:1:p:303-338
    DOI: 10.1111/caje.12373
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    1. Daniel CHIQUIAR & Martín TOBAL & Renato YSLAS, 2019. "Measuring and understanding trade in service tasks," International Labour Review, International Labour Organization, vol. 158(1), pages 169-190, March.

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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