Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19080
Authors: 
Lorentowicz, Andzelika
Marin, Dalia
Raubold, Alexander
Year of Publication: 
2005
Series/Report no.: 
CESifo Working Paper 1616
Abstract: 
Feenstra and Hanson (1997) have argued in the context of the North American Free Trade Agreement that US outsourcing to Mexico leads to an increase in the skill premium in both the US and Mexico. In this paper we show on the example of Austria and Poland that with the new international division of labour emerging in Europe Austria, the high income country, is specializing in the low skill intensive part of the value chain and Poland, the low income country, is specializing in the high skill part. As a result, skilled workers in Austria are losing from outsourcing, while gaining in Poland. In Austria, relative wages for human capital declined by 2 percent during 1995-2002 and increased by 41 percent during 1994-2002 in Poland. In both countries outsourcing contributes roughly 35 percent to these changes in the relative wages for skilled workers. Furthermore, we show that Austria's R&D policy has contributed to an increase in the skill premium there
JEL: 
J31
F23
F21
P45
Document Type: 
Working Paper

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