Trade, offshoring, and the invisible handshake

• 成果类型: Article
• 署名作者: Karabay, Bilgehan; McLaren, John
• 署名单位: University of Virginia; University of Auckland
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2010.06.001
• 发表日期: 2010
• 页码: 26-34
• 关键词: Offshoring; implicit contracts; Invisible handshake

摘要

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. (C) 2010 Elsevier B.V. All rights reserved.