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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/46610
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| Title: | | Managerial versus production wages: Offshoring, country size and endowments  |
| Authors: | | Benz, Sebastian Kohler, Wilhelm |
| Issue Date: | | 2010 |
| Series/Report no.: | | CESifo working paper: Trade Policy 3292 |
| Abstract: | | In this paper, we explore the role of trade in differentiated final goods as well offshoring of tasks for inequality both within and between countries. We emphasize the distinction between managerial and production labor. Production labor is assumed to be a variable input composed of tradable tasks, while managerial labor is a fixed, non-tradable input. We use a 2-country model recently developed by Grossman & Rossi-Hansberg (2010b) that highlights trade in production task, driven by Marshallian economies of scale. We analyze country size and relative endowment effects on the managerial wage premium as well as on international inequality measured in income per head. We compare these effects in a world where trade is restricted to differentiated final goods with a world with trade in both final goods and production tasks. |
| Subjects: | | offshoring economies of scale income distribution international inequality |
| JEL: | | F12 F16 F23 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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