Did capital replace labor? New evidence from offshoring

Choi Paul Moon Sub, Kim Kee Beom and Seo Jinyoung ()
Additional contact information
Choi Paul Moon Sub: College of Business Administration, Ewha Womans University, 52 Ewhayeodae-gil, Seodaemun-gu, Seoul 03760, Republic of Korea
Kim Kee Beom: International Labour Organization, 4 route des Morillons, CH-1211 Genève 22, Switzerland
Seo Jinyoung: Department of Economics, University of California, 1118 Social Sciences and Humanities, Davis, CA 95616, USA

The B.E. Journal of Macroeconomics, 2019, vol. 19, issue 1, 22

Abstract: Neoclassical theory explains the global decline of the labor income share by capital-labor substitution due to the affordable relative price of capital. Based on the Morishima elasticities of substitution among capital, labor disaggregated into high-, medium-, and low-skill groups, and imported and domestic intermediate inputs, offshoring appears to disproportionately affect job polarization globally and in developed economies. These findings in favor of the globalization hypothesis are buttressed by multivariate panel regressions. Lastly, offshoring might reinforce technological changes, a double-edged sword that can boost productivity growth but exacerbate wage inequality.

Keywords: job polarization; labor income share; morishima elasticity of substitution; offshoring; technological changes (search for similar items in EconPapers)
JEL-codes: D24 E22 E25 F16 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/bejm-2018-0079 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejmac:v:19:y:2019:i:1:p:22:n:14

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejm/html

DOI: 10.1515/bejm-2018-0079

Access Statistics for this article

The B.E. Journal of Macroeconomics is currently edited by Arpad Abraham and Tiago Cavalcanti

More articles in The B.E. Journal of Macroeconomics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().