Offshoring, Exporting, and Jobs

José Groizard, Priya Ranjan () and Antonio Rodriguez-Lopez ()
Additional contact information
Priya Ranjan: University of California, Irvine
Authors registered in the RePEc Author Service: Priyaranjan Jha

No 61, DEA Working Papers from Universitat de les Illes Balears, Departament d'Economía Aplicada

Abstract: We construct a two-sector model - one producing a homogeneous good and the other producing differentiated goods - with labor market frictions to study the impact of offshoring on intrafirm, intrasectoral, and intersectoral reallocation of jobs, and on the economy-wide unemployment rate. A reduction in the offshoring cost affects intrafirm and intrasectoral reallocation in the differentiated-good sector through a job-relocation effect, a productivity effect, and a competition effect. The key parameters determining the impact of offshoring on reallocation of jobs at various margins as well as on the economy-wide unemployment rate are the elasticity of substitution between inputs and the elasticity of demand for differentiated goods. Allowing differentiated-good firms to export creates an additional channel through which a reduction in the cost of offshoring affects jobs and unemployment. We also show that the implications of a reduction in the cost of trading final goods are different from those of a reduction in the offshoring cost."

Keywords: heterogeneous firms; offshoring costs; search frictions; unemployment (search for similar items in EconPapers)
JEL-codes: F12 F16 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-int and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.uib.es/depart/deaweb/deawp/pdf/w61.pdf (application/pdf)

Related works:
Working Paper: Offshoring, Exporting, and Jobs (2013)
Working Paper: Offshoring, Exporting, and 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:ubi:deawps:61

Access Statistics for this paper

More papers in DEA Working Papers from Universitat de les Illes Balears, Departament d'Economía Aplicada Contact information at EDIRC.
Bibliographic data for series maintained by Xisco Oliver ().