فناوری و برون سپاری : توضیح افزایش شکاف دستمزد

The recent phenomenon of widening skilled–unskilled wage gap in both North and South has been either explained by a technological change or by increasing trade or globalization. The paper provides a new explanation and emphasizes that it is neither technology nor trade alone but both that have contributed to the widening wage inequality. It argues, using a two-country occupational choice model, that any technological improvement in North results in a rise in the skilled–unskilled wage gap in North via an increase in the productivity of skilled labor followed by a rise in the same in South via trade or the outsourcing activities of the northern firms. The extent of outsourcing or the number of northern firms that outsource jobs to South is endogenously determined in the model. The paper also analyzes some major economic impacts of such a technological upgradation in North on the southern economy.

This rise in wage inequality being a great concern for economists, several attempts, as explained below, have been made to provide ex-post justifications. While, for the developed countries, who export mostly skilled intensive commodities, simple trade theory can explain such a rise in wage inequality as an impact of opening up of economies but such theories contradict the rise in wage inequality in the developing countries that primarily export unskilled labor intensive commodities. The basis for such an observation relate mainly to technology bias towards skilled labor (Lawrence and Slaughter, 1993), increased trade (Leamer, 1994 and Borjas and Ramey, 1995) or, outsourcing activities of northern firms to South, with cheaper labor cost as well as large market for their products in South. For example, Feenstra and Hanson (1999) attribute 15% of the rise in wage gap in US to outsourcing by US MNFs. Feenstra and Hanson (1997) show that growth in FDI is positively correlated with a rise in relative demand of skilled labor, which is consistent with the hypothesis that outsourcing by the multinationals has been a significant factor in the rise in demand for skilled labor in Mexico. In another paper by Feenstra and Hanson (1995) a factor endowment model has been presented where one good is produced by continuum of goods ranked with skill intensity. North outsources relatively unskilled intensive products to South, where these are relatively skilled intensive. Thus an inflow of northern capital in South causes a rise in the relative demand for skilled labor in both the countries. Their paper could explain the fall in the relative demand for unskilled labor hence the relative fall in unskilled wage in US during 1980s. Gao (2002) presents a two-country model where outsourcing and skilled–unskilled wage are endogenously determined and shows that globalization, in terms of reduction in trade costs, leads to a rise in both outsourcing and skilled–unskilled wage in both the countries. Glazer and Ranjan (2003) provide another interesting explanation. In a two-country framework, if skilled people consume relatively skilled intensive goods compared to the unskilled people, an increase in supply of skilled labor in either country might result in an increase in demand for skilled labor and raise skilled–unskilled wage gap in both countries. Beaulieu et al. (2004) argue, a reduction in trade barrier in hi-tech sectors might lead to such a rise in wage gap in both developed and developing countries.

The recent widening of wage inequality in both North and South has been attributed by some economists to the skill-biased technical-change and by others to increased globalization. The paper explains this phenomenon with an alternative view using an occupational choice framework where it formally models and endogenously determines outsourcing. The paper shows that an exogenous technological improvement in North causes a rise in the skilled wage in the northern economy via an increased labor productivity whereas the skilled wage in South rises purely due to the endogenous trading (or outsourcing) effect of the northern firms induced by the technological improvement in North and thus the paper concludes that it is neither trade nor technology alone but the combined effect of both. Relative to the existing literature, this is the most distinguishing feature of the paper. The paper also analyzes some of the major economic impacts of the technological improvement on the southern economy. It shows, if the northern economy is sufficiently unequal (equal) equilibrium outsourcing increases (decreases) as a result of a technological improvement in North and then finds the condition for a fall in the aggregate income of the southern economic agents as a result of the technological improvement in North. Lastly the paper shows, for a very unequal outsourcing country, the share of domestic sector (or, income generated by the domestic entrepreneurs) in the total income generated by all the southern entrepreneurs (which includes domestic entrepreneurs as well as the outsourcing firms) shrinks after such a technological improvement in North via a decrease in the number of domestic entrepreneurs.