Template-type: ReDif-Paper 1.0
Author-Name: Vallizadeh E. 
Author-Name: Muysken J. 
Author-Name: Ziesemer T.H.W. 
Author-workplace-name: UNU-MERIT
Title: Offshoring of medium-skill jobs, polarization, and productivity effect: Implications for wages and low-skill unemployment
Abstract:  We examine the effects of endogenous offshoring on cost-efficiency,  wages and unemployment in a task assignment model with skill  heterogeneity. Exact conditions for the following insights are derived.  The distributional effect of offshoring high- low-skill-intensive  tasks is similar to unskilled- skill-biased technology changes, while  offshoring medium-skill-intensive tasks induces wage polarization.  Offshoring improves cost-efficiency through international task  reallocation and puts a downward pressure on all wages through domestic  skill-task reallocation. If elasticities of task substitution are low  high, the downward pressure on wages in neighbouring skill segments is  low high with a net effect of higher lower wages and employment.
Keywords: Trade and Labor Market Interactions, Globalization, Human resources, Employment, Human Capital, Skills, Occupational Choice, Labor Productivity, Unemployment 
Classification-JEL: F16, F66, J21, J24, J64
Series: UNU-MERIT Working Papers
Creation-Date: 2015
Number: 2015-004
File-URL: https://unu-merit.nl/publications/wppdf/2015/wp2015-004.pdf
File-Format: application/pdf
File-Size: 737881
Handle: RePEc:unm:unumer:2015004