Offshoring and skill-biased technical change in the context of US protectionism / Pablo Agnese (UIC Barcelona and IZA), Jana Hromcová (ESSCA School of Management) ; IZA Institute of Labor Economics
VerfasserAgnese, Pablo ; Hromcová, Jana
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, September 2019
Elektronische Ressource
Umfang1 Online-Ressource (29 Seiten) : Diagramme
SerieDiscussion paper ; no. 12593
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
Offshoring and skill-biased technical change in the context of US protectionism [0.43 mb]
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We discuss the effects of offshoring on the labor market in a matching model with endogenous adjustment of educational skills. We carry out a comparative statics analysis and show that offshoring leads to a restructuring of the economy through skill-biased technical change (SBTC) where overall welfare is improved. In a policy exercise we show that, if offshoring were to be opposed by a protectionist agenda, labor market flexibility can bring about the same welfare gain. In addition, we offer an empirical analysis aimed at verifying the correlation be- tween offshoring and SBTC in US manufacturing industries in recent years. Our results show that different offshoring strategies affect SBTC differently. In particular, the evidence suggests that while high-skill offshoring strategies open the skill gap, low-skill offshoring strategies tend to work in the opposite direction.