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Kikuchi, Toru
Van Long, Ngo
Year of Publication: 
Series/Report no.: 
CESifo Working Paper No. 3542
Center for Economic Studies and ifo Institute (CESifo), Munich
Using a two-factor (labor and capital), two-good (shift-working and non shiftworking commodities) model with two countries (Home and Foreign) which are located in different time zones, we highlight the impact of trade in labor services (via communication networks) on the comparative advantage of countries capable of such trade. It is shown that a comparative advantage in the shift-working commodity is held by pairs of countries in different time zones and connected through a good communication network. Concerning factor prices, if the shiftworking commodity is capital (resp. labor) intensive, the wage rate for day-shift labor will decrease (resp. increase) as a result of trade in labor services. It is also demonstrated that this kind of labor services utilization is mutual: some of Home's day-shift labor will be utilized for Foreign night-shift, and vice versa. Thus, periodic trade in labor services occurs across countries.
time zones
trade in labor services
Document Type: 
Working Paper

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