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Author Benz, Sebastian ♦ Kohler, Wilhelm K.
Source EconStor
Content type Text
Publisher Verein für Socialpolitik
File Format PDF
Language English
Subject Domain (in DDC) Social sciences ♦ Economics
Subject Keyword Offshoring ♦ Skill Premium ♦ Scale Effect ♦ Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ♦ Trade and Labor Market Interactions ♦ Multinational Firms; International Business
Abstract We look at managerial and production wages in countries that differ in size and relative endowments. Production labor is assumed to be a variable input composed of tradable tasks, while managerial labor is a fixed, non-tradable input. Task performance is subject to increasing returns to scale on the country level, as in Grossman & Rossi-Hansberg (2009). We first analyze country size and relative endowment effects on wages, ruling out task trade altogether, followed by numerical simulations highlighting the degree of freeness of task trade as an important further determinant of relative wages, both within and across countries.
Part of series Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Globalization and Technical Change xB14-V2
Learning Resource Type Article
Publisher Date 2010-01-01
Publisher Place Frankfurt a. M.
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