Offshoring Domestic Jobs

Hartmut Egger (), Udo Kreickemeier and Jens Wrona

Chapter 2 in International Trade and Labor Markets:Welfare, Inequality and Unemployment, 2017, pp 27-70 from World Scientific Publishing Co. Pte. Ltd.

Abstract: We develop a two-country general equilibrium model, in which heterogeneous firms offshore routine tasks to a low-wage host country. In the presence of fixed costs for offshoring the most productive firms self-select into offshoring, which leads to a reallocation of domestic labor towards less productive uses if offshoring costs are high. As a consequence domestic welfare may fall. The reallocation effect is reversed and domestic welfare rises if offshoring costs are low. The aggregate income distribution, comprising wages and entrepreneurial incomes, becomes more unequal with offshoring.

Keywords: International Trade; Inequality; Labor Markets; Unemployment; Offshoring (search for similar items in EconPapers)
JEL-codes: J01 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789813224919_0002 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789813224919_0002 (text/html)
Ebook Access is available upon purchase.

Related works:
Journal Article: Offshoring domestic jobs (2015)
Working Paper: Offshoring Domestic Jobs (2013)
Working Paper: Offshoring domestic jobs (2013)
Working Paper: Offshoring Domestic Jobs (2013)
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:wsi:wschap:9789813224919_0002

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().