Offshoring in a knowledge economy
By: Pol Antràs, Luis Garicano, Esteban Rossi-Hansberg.
Contributors: Garicano, Luis.; Rossi-Hansberg, Esteban.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 11094.; Working paper series (National Bureau of Economic Research) -- working paper no. 11094.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 47
Subjects: Globalization -- Economic aspects
Description: "How does the formation of cross-country teams affect the organization of work and the structure of wages? To study this question we propose a theory of the assignment of heterogeneous agents into hierarchical teams, where less skilled agents specialize in production and more skilled agents specialize in problem solving. We first analyze the properties of the competitive equilibrium of the model in a closed economy, and show that the model has a unique and efficient solution. We then study the equilibrium of a two-country model (North and South), where countries differ in their distributions of ability, and in which agents in different countries can join together in teams. We refer to this type of integration as globalization. Globalization leads to better matches for all southern workers but only for the best northern workers. As a result, we show that globalization increases wage inequality in the South but not necessarily in the North. We also study how globalization affects the size distribution of firms and the patterns of consumption and trade in the global economy"--National Bureau of Economic Research web site.
Notes: "January 2005."

Includes bibliographical references (p. 37-38).

Also available in PDF from the NBER world wide web site (www.nber.org).