Offshoring and Occupational Specificity of Human Capital
Moritz Ritter ()
MPRA Paper from University Library of Munich, Germany
This paper develops a dynamic general equilibrium model in which workers acquire human capital specific to the task they complete. The dynamic nature of the model allows for differentiation between short and long run effects of offshoring on productivity and labour market outcomes. The welfare effects of increased offshoring are unambiguously positive; their magnitude depends on the difference between autarky and world relative prices, but not on the skill-content of offshored and inshored tasks. For reasonable terms of trade, the steady state welfare gains are found to be between 1.8% and 4% in the calibrated model. The distribution of the gains from trade critically depends on the time horizon: in the short term, workers with human capital specific to the inshored occupations gain, while workers with human capital specific to the offshored occupations lose. In the long run, the gains from trade are equally distributed among ex-ante identical agents.
Keywords: Offshoring; Sectoral Labour Reallocation; Human Capital (search for similar items in EconPapers)
JEL-codes: F16 J62 E24 J24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hrm and nep-lab
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Journal Article: Offshoring and occupational specificity of human capital (2014)
Working Paper: Offshoring and Occupational Specificity of Human Capital (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:19671
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