Would a North-South Free Trade Agreement Hurt Unskilled Labor in the North?

Chu-Ping Lo ()
Additional contact information
Chu-Ping Lo: Department of Agricultural Economics, National Taiwan University, Taipei, Taiwan, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2015, vol. 10, issue 4, 629-642

Abstract: I present a simple model to examine the impact of international outsourcing on the welfare of skilled and unskilled labor. In this model, specialized business services are to facilitate manufacturing production, creating additional welfare gains in the presence of positive production externalities. Policies that favor the business service sector contribute to the development of a larger bundle of specialized business services, generating more welfare gains to not only skilled but also unskilled labor. Thus, a country's unskilled labor is not necessarily worse off with open trade if the country is prosperous in business service provisions.

Keywords: international outsourcing; wage inequality; free trade agreement (search for similar items in EconPapers)
JEL-codes: F13 F15 F16 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
http://journal.hep.com.cn/fec/EN/10.3868/s060-004-015-0029-1 (application/pdf)

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:fec:journl:v:10:y:2015:i:4:p:629-642

Access Statistics for this article

Frontiers of Economics in China-Selected Publications from Chinese Universities is currently edited by LONG Jie

More articles in Frontiers of Economics in China-Selected Publications from Chinese Universities from Higher Education Press
Bibliographic data for series maintained by Frank H. Liu ().