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doi:10.1016/j.infoecopol.2007.01.002 
Copyright © 2007 Elsevier B.V. All rights reserved.
Distant labour supply, skills and induced technical change
Ashima Goyal
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Received 17 May 2006;
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Abstract
To analyze the consequences of new technologies, which make it possible to employ distant labour, we model a developed country with high- and medium-skilled labour interacting with an emerging market economy (EME) with medium- and low-skilled labour. Expansion in labour supply induces medium-skill biased technical change, which raises the demand for such labour. As a result, inequalities tend to fall in the developed country, skill premiums rise marginally in the EME, but equality rises because labour employed in the low-skilled sector shrinks. Inequality falls across the countries since average wages, information and access rise in the EME.
Keywords: Internet and communication technology; Induced technological change; Relative factor supplies; Labour skills
JEL classification codes: O31; O14; J61
Article Outline
- 1. Introduction
- 2. Why is more labour available on the global market?
- 3. Modelling the effects of technical change and relative labour skills on market outcomes
- 4. Adding up the effects of global sourcing
- 5. Policy implications and concluding remarks
- Acknowledgements
- References
