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Title:Offshoring tasks, yet creating jobs? PDF Logo
Authors:Kohler, Wilhelm K.
Wrona, Jens
Issue Date:2010
Series/Report no.:CESifo working paper Trade Policy 3019
Abstract:We show that in a Ricardo-Viner-type trade model with unemployment due to search and matching the productivity effect of offshoring emphasized by Grossman & Rossi-Hansberg (2008) emerges as a vehicle of job creation. Improvements in the technology of offshoring causes job losses at the extensive margin where ever more tasks are performed abroad, but it also causes job creation from cost-savings associated with enhanced trade in tasks. We identify conditions under which job creation dominates job destruction. We also show that employment may follow a non-monotonic pattern of adjustment to successive improvements in the technology of offshoring.
Subjects:offshoring
trade in tasks
unemployment
search and matching
JEL:F16
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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