Abstract not found

Our paper investigates the link between outsourcing and wages utilising a large household panel and combining it with industry level information on industries ’ outsourcing activities from input-output tables. By doing so we can arguably overcome the potential endogeneity bias as well as other shortcomings that affect industry level studies. We find that fragmentation has had a marked impact on wages. Distinguishing three skill categories we find evidence that outsourcing reduced the real wage for workers in the lowest skill categories; this result is robust to a number of different specifications and definitions of outsourcing. Furthermore we find some evidence that high-skilled workers experienced increased wages due to fragmentation.

The authors are grateful to Rod Falvey for very helpful comments on an earlier version of this paper. The usual disclaimer applies. Financial support from the Leverhulme Trust (Programme Grant F114/BF) is gratefully acknowledged. Paulo Bastos thanks Fundação para a Ciência e a Tecnologia (SFRH/BD/17274/2004) for finantial support. Open Shop Unions and International Trade Liberalisation by

Abstract. In this paper, we examine Hong Kong's role in intermediating trade between China and the rest of the world. Hong Kong traders distribute a large fraction of China's exports. Net of customs, insurance, and freight charges, re-exports of Chinese goods are much more expensive when they leave Hong Kong than when they enter. Hong Kong markups on reexports of Chinese goods are higher for differentiated products, products with higher variance in export prices, and products sent to China for further processing. These results are consistent with the view that traders resolve informational problems in exchange. Additional results suggest that traders price discriminate across destination markets and use transfer pricing to shift income from high-tax countries to Hong Kong. The authors thank seminar participants at Columbia University, Florida International

This paper is concerned about addressing a question that has become critical in in-ternational trade, during the past three decades: What factors explain the worldwide increase in skill premiums following international trade integration and increasingly globalized economies? I propose a new theory to address this question through the lens of …rm organization and labor specialization. In this model, I show how trade lib-eralization will result in reallocation of high skilled workers within an industry towards more productive …rms and exporters. Speci…cally, reducing trade costs induces new exporters to choose a higher degree of labor specialization within high-skilled or low-skilled workers, to reduce their marginal costs, and to evolve into more skill-intensive entities. I further demonstrate how these internal organizational changes directly a¤ect aggregate skill intensity and the skill premium in a general equilibrium setting. Lastly, I calibrate this model to Mexican data to quantify the rise in the skill premium in the

Abstract This paper examines how immigration affects native wages by exploiting an unexpected episode of immigrant influx. The episode happened in Hong Kong, when its government unexpectedly relaxed the restriction on immigration from mainland China in 1993, resulting in a seven-fold increase in the net inflow of Chinese immigrants between 1992 and 1993. We use variation in the employment share of immigrants across occupations for identification. To tackle endogeneity between wages and immigrant inflows across occupations, we use Welch's (1999) congruence indices, which capture the degree of substitutability between workers from different skill groups, to construct instruments for the prevalence of Chinese immigrants in an occupation. Using micro-level data, our two-stage-least-squares estimates show that a 1 percentage point increase in the ratio of new Chinese immigrants to natives decreases native monthly real wages in the same occupation by 2.8-3.6 percents (controlling for immigrant shocks in similar occupations). Within an occupation, female and more skilled native workers experience more adverse wage impact, reflecting a high switching cost associated with occupation-specific human capital. JEL Classification Numbers: F22, J61

Abstract. This paper reviews the empirical literature on the effects of offshoring and foreign activities of multinational enterprises on developed countries ’ labour markets. Results suggest that material offshoring worsens wage inequality between skilled and unskilled workers; it also seems to make employment more volatile, by raising the elasticity of labour demand and the risk of job losses. Service offshoring exerts at most small negative effects on total employment, and changes the composition of the workforce in favour of high-skilled white-collar employees. Multinationals tend to substitute domestic and foreign labour in response to changes in relative wages across countries; substitutability is weak, however, and mainly driven by horizontal, market-seeking foreign direct investments.

We argue that trade in intermediate inputs, or “global production sharing, ” is a potentially important explanation for the increase in the wage gap between skilled and unskilled workers in the US and elsewhere. Using a simple model of heterogeneous activities within an industry, we show that trade in inputs has much the same impact on labor demand as does skill-biased technical change: both of these will shift demand away from low-skilled activities, while raising relative demand and wages of the higher skilled. Thus, distinguishing whether the change in wages is due to international trade, or technological change, is fundamentally an empirical rather than a theoretical question. We review three empirical methods that have been used to estimate the effects of trade in intermediate inputs and technological change on wages, and summarize the evidence for the US and other countries.

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Foreign outsourcing and firm-level characteristics: