Shift Working and Trade in Labor Services with Time Zone Differences
Using a two-factor (labor and capital), two-good (shift-working and non shiftworking commodities) model with two countries (Home and Foreign) which are located in different time zones, we highlight the impact of trade in labor services (via communication networks) on the comparative advantage of countries capable of such trade. It is shown that a comparative advantage in the shift-working commodity is held by pairs of countries in different time zones and connected through a good communication network. Concerning factor prices, if the shiftworking commodity is capital (resp. labor) intensive, the wage rate for day-shift labor will decrease (resp. increase) as a result of trade in labor services. It is also demonstrated that this kind of labor services utilization is mutual: some of Home’s day-shift labor will be utilized for Foreign night-shift, and vice versa. Thus, periodic trade in labor services occurs across countries.
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- Roger Betancourt & Christopher Clague & Arvind Panagariya, 1985. "Capital Utilization and Factor Specificity," Review of Economic Studies, Oxford University Press, vol. 52(2), pages 311-329.
- Betancourt,Roger R. & Clague,Christopher K., 2008. "Capital Utilization," Cambridge Books, Cambridge University Press, number 9780521070287.
- Ronald W. Jones & Sugata Marjit, 2001. "The Role of International Fragmentation in the Development Process," American Economic Review, American Economic Association, vol. 91(2), pages 363-366, May.
- Matsuoka, Yuji & Fukushima, Marcelo, 2009. "Time Zones, Shift Working and Outsourcing through Communications Networks," MPRA Paper 13355, University Library of Munich, Germany.
- Marjit, Sugata, 2007. "Trade theory and the role of time zones," International Review of Economics & Finance, Elsevier, vol. 16(2), pages 153-160.
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