Managerial versus production wages: Offshoring, country size and endowments

Arbeitspapier

In this paper, we explore the role of trade in differentiated final goods as well offshoring of tasks for inequality both within and between countries. We emphasize the distinction between managerial and production labor. Production labor is assumed to be a variable input composed of tradable tasks, while managerial labor is a fixed, non-tradable input. We use a 2-country model recently developed by Grossman & Rossi-Hansberg (2010b) that highlights trade in production task, driven by Marshallian economies of scale. We analyze country size and relative endowment effects on the managerial wage premium as well as on international inequality measured in income per head. We compare these effects in a world where trade is restricted to differentiated final goods with a world with trade in both final goods and production tasks.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3292

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Trade and Labor Market Interactions ; Multinational Firms; International Business
• Subject: offshoring ; economies of scale ; income distribution ; international inequality ; Offshoring ; Einkommensverteilung ; Produktdifferenzierung ; Außenhandelsliberalisierung ; Anforderungsprofil ; Produktionsfaktor ; Skalenertrag ; Industriearbeit ; Handelbares Gut ; Führungskräfte ; Nicht-handelbares Gut ; Lohnstruktur ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Benz, Sebastian ; Kohler, Wilhelm
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/46610
• Last update: 10.03.2025, 11:43 AM CET