Trade, offshoring, and the invisible handshake
By: Bilgehan Karabay, John McLaren.
Contributors: McLaren, John.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 15048; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 15048.
Publisher: National Bureau of Economic Research
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "We study the effect of globalization on the volatility of wages and worker welfare in a model in which risk is allocated through long-run employment relationships (the 'invisible handshake').  Globalization can take two forms: International integration of commodity markets (i.e., free trade) and international integration of factor markets (i.e., offshoring).  In a two-country, two-good, two-factor model we show that free trade and offshoring have opposite effects on rich-country workers.  Free trade hurts rich-country workers, while reducing the volatility of their wages; by contrast, offshoring benefits them, while raising the volatility of their wages.  We thus formalize, but also sharply circumscribe, a common critique of globalization"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/9/2009.

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