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Offshoring of medium-skill jobs, polarization, and productivity effect : implications for wages and low-skill unemployment

Author

Listed:
  • Vallizadeh, Ehsan

    (Institute for Employment Research (IAB), Nuremberg, Germany)

  • Muysken, Joan

    (Maastricht University)

  • Ziesemer, Thomas

    (Maastricht University)

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-skillintensive 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 neighboring skill segments is low (high) with a net effect of higher (lower) wages and employment." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Vallizadeh, Ehsan & Muysken, Joan & Ziesemer, Thomas, 2015. "Offshoring of medium-skill jobs, polarization, and productivity effect : implications for wages and low-skill unemployment," IAB-Discussion Paper 201507, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:201507
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    2. Thomas Ziesemer & Anne von Gässler, 2021. "Ageing, human capital and demographic dividends with endogenous growth, labour supply and foreign capital," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(2), pages 129-160, May.

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    More about this item

    Keywords

    Bundesrepublik Deutschland ; Ausland ; Auswirkungen ; Beschäftigungseffekte ; Einkommenseffekte ; Lohnhöhe ; mittlere Qualifikation ; Niedriglohn ; Niedrigqualifizierte ; outsourcing ; Produktivitätseffekte ; Qualifikationsstruktur;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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