Outsourcing, Factor Prices and Skill Formation in Countries with Non-overlapping Time Zones

Mandal, Biswajit and Marjit, Sugata and Nakanishi, Noritsugu (2015): Outsourcing, Factor Prices and Skill Formation in Countries with Non-overlapping Time Zones.

Abstract

Time Zone difference induced changes in trade and factor prices are relatively new concerns in trade literature. Here in this paper we formulate a trade model capturing the issue of Time Zone difference and communication technology revolution together to show that due to these developments skilled workers benefit. Though wage inequality between skilled and unskilled workers is widened under reasonable and, of course, sensible condition. Return to capital dwindles while educational capital gets relatively high return. These changes also attract educational capital from abroad and eventually alter the sectoral composition of the economy in favor of more skill based one.

• Item Type: MPRA Paper
• Language: English
• Keywords: Time Zone Differences; Trade in Business Services; Skilled and Unskilled Labor; Day-shift and Night-shift Work, Educational Capital
• Subjects: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements

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