We study the implications of offshoring on innovation, technology, and wage inequality in a Ricardian model with directed technical change. Profit maximization determines both the extent of offshoring and the direction of technological progress. A fall in the offshoring cost induces technical change with an ambiguous factor bias. When the initial cost of offshoring is high, an increase in offshoring opportunities causes a fall in the real wages of unskilled workers in industrial countries, skill-biased technical change and rising skill premia. When the offshoring cost is sufficiently low, instead, offshoring induces technical change biased in favor of the unskilled workers.

Acemoglu, D., Gancia, G., Zilibotti, F. (2015). Offshoring and directed technical change. AMERICAN ECONOMIC JOURNAL. MACROECONOMICS, 7(3), 84-122 [10.1257/mac.20130302].

Offshoring and directed technical change

Gancia G;
2015

Abstract

We study the implications of offshoring on innovation, technology, and wage inequality in a Ricardian model with directed technical change. Profit maximization determines both the extent of offshoring and the direction of technological progress. A fall in the offshoring cost induces technical change with an ambiguous factor bias. When the initial cost of offshoring is high, an increase in offshoring opportunities causes a fall in the real wages of unskilled workers in industrial countries, skill-biased technical change and rising skill premia. When the offshoring cost is sufficiently low, instead, offshoring induces technical change biased in favor of the unskilled workers.
Articolo in rivista - Articolo scientifico
offshoring, wage inequality
English
2015
7
3
84
122
reserved
Acemoglu, D., Gancia, G., Zilibotti, F. (2015). Offshoring and directed technical change. AMERICAN ECONOMIC JOURNAL. MACROECONOMICS, 7(3), 84-122 [10.1257/mac.20130302].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/396551
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