Use this identifier to quote or link this document: http://hdl.handle.net/2072/257724

Low-skill offshoring and welfare compensation policies
Agnese, Pablo; Hromcová, Jana
Universitat Autònoma de Barcelona. Departament d'Economia Aplicada
We analyze the effects of low-skill offshoring on welfare. In the context of a matching model with different possible equilibria, we discuss two alternative policies that could potentially outweigh the negative welfare effects of offshoring, namely, a change of the unemployment bene.ts and the .exibilization of the labor market. Our calibrations for the German economy suggest that the .exibilization of the labor market can bring low-skill workers to pre-offshoring welfare levels by slightly reducing the vacancy costs, something that cannot be accomplished by meddling with the unemployment bene.ts scheme. In addition, we .find that a full compensation can be achieved by an upgrading of low-skill workers, its size depending on the type of equilibrium involved. In sum, our analysis gives support to .exibilization and upgrading by education as best therapies for offshoring.
2015-06
Offshoring
Welfare
Unemployment benefits
Labor market flexibility
Upgrading
331 - Treball. Relacions laborals. Ocupació. Organització del treball
Mercat de treball
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29 p.
Working Paper
Universitat Autònoma de Barcelona. Departament d'Economia Aplicada
Document de treball (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada);15.05
         

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