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Inhaltsbereich: Institut für Arbeitsmarkt- und Berufsforschung

Offshoring of medium-skill jobs, polarization, and productivity effect

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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))

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Bibliographical information

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, 07/2015), N├╝rnberg, 55 p.
 

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