Offshoring and Occupational Specificity of Human Capital

Moritz Ritter

MPRA Paper from University Library of Munich, Germany

Abstract: 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: E24 F16 J24 J62 (search for similar items in EconPapers)
Date: 2009-12-30
New Economics Papers: this item is included in nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Offshoring and occupational specificity of human capital (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:19671

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