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Offshoring and labor markets in developing countries

Author

Listed:
  • Arnab K. Basu

    (Cornell University, USA, and IZA, Germany)

  • Nancy H. Chau

    (Cornell University, USA, and IZA, Germany)

Abstract

Developing countries are often seen as unquestionable beneficiaries in the phenomenal rise of global value chains in international trade. Offshoring—the cross-border trade in intermediate goods and services which facilitate country-level specialization in subsets of production tasks—enables an early start in global trade integration even when the requisite technology and knowhow for cost-effective production from scratch to finish are not yet acquired. A growing economics literature suggests a more nuanced view, however. Policymakers should be mindful of issues related to inequality across firms and wages, labor standards, and effects of trade policy.

Suggested Citation

  • Arnab K. Basu & Nancy H. Chau, 2022. "Offshoring and labor markets in developing countries," World of Labour, LISER, pages 499-499, September.
    • Handle: RePEc:iza:izawol:journl:2022:n:499
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    References listed on IDEAS

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    1. Ernst, Christoph. & Sánchez-Ancochea, Diego., 2008. "Offshoring and employment in the developing world : the case of Costa Rica," ILO Working Papers 994130083402676, International Labour Organization.
    2. Brian J. Aitken & Ann E. Harrison, 2022. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 6, pages 139-152, World Scientific Publishing Co. Pte. Ltd..
    3. Cebreros Alfonso & Salcedo Alejandrina & Chiquiar Daniel & Heffner-Rodríguez Aldo, 2020. "Trade Policy Uncertainty and its Effect on Foreign Direct Investment: Evidence from Mexico," Working Papers 2020-14, Banco de México.
    4. Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "Trading Tasks: A Simple Theory of Offshoring," American Economic Review, American Economic Association, vol. 98(5), pages 1978-1997, December.
    5. Subhayu Bandyopadhyay & Arnab K. Basu & Nancy H. Chau & Devashish Mitra, 2020. "Consequences Of Offshoring To Developing Nations: Labor‐Market Outcomes, Welfare, And Corrective Interventions," Economic Inquiry, Western Economic Association International, vol. 58(1), pages 209-224, January.
    6. repec:ilo:ilowps:413008 is not listed on IDEAS
    7. Pol Antràs & Robert W. Staiger, 2012. "Offshoring and the Role of Trade Agreements," American Economic Review, American Economic Association, vol. 102(7), pages 3140-3183, December.
    8. Kalyan K. Sanyal & Ronald W. Jones, 2018. "The Theory of Trade in Middle Products," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 13, pages 203-231, World Scientific Publishing Co. Pte. Ltd..
    9. World Bank, 2020. "World Development Report 2020," World Bank Publications - Books, The World Bank Group, number 32437, April.
    10. Alan S. Blinder, 2009. "How Many US Jobs Might be Offshorable?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 10(2), pages 41-78, April.
    11. Lorenzo Caliendo & Fernando Parro, 2015. "Estimates of the Trade and Welfare Effects of NAFTA," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 1-44.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Abreha,Kaleb & Gladys Lopez-Acevedo, 2024. "Trade Restructuring : Assessing Labor Market and Welfare Effects," Policy Research Working Paper Series 10955, The World Bank.

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    Keywords

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    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F6 - International Economics - - Economic Impacts of Globalization

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