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Eurasian Economic Review

, Volume 8, Issue 2, pp 289–304 | Cite as

Outsourcing, factor prices and skill formation in countries with non-overlapping time zones

  • Biswajit Mandal
  • Sugata Marjit
  • Noritsugu Nakanishi
Original Paper
  • 23 Downloads

Abstract

Time zone difference induced changes in trade and factor prices are relatively new concerns in trade literature. Here in this paper, we formulate a trade model capturing the issue of time zone difference and communication technology revolution together to show that due to these developments skilled workers benefit. Though wage inequality between skilled and unskilled workers is widened under reasonable and, of course, sensible condition. Return to capital dwindles while educational capital gets relatively high return. These changes also attract educational capital from abroad and eventually alter the sectoral composition of the economy in favor of more skill based one. One interesting implication of our results points to a provocative choice problem for the country concerned regarding high wage disparity and low skill formation which itself is a question of political economy.

Keywords

Time zone differences Trade in business services Skilled and unskilled labor Day-shift and night-shift work Educational capital 

JEL Classification

F12 F16 F21 

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Copyright information

© Eurasia Business and Economics Society 2018

Authors and Affiliations

  • Biswajit Mandal
    • 1
  • Sugata Marjit
    • 2
  • Noritsugu Nakanishi
    • 3
  1. 1.Department of Economics and PoliticsVisva-Bharati UniversitySantiniketanIndia
  2. 2.Centre for Studies in Social Sciences CalcuttaKolkataIndia
  3. 3.Graduate School of EconomicsKobe UniversityKobeJapan

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