محدوده های زمانی، شیفت کاری، و برون سپاری بین المللی

We build a trade model with two identical countries located in different time zones and one sector with intermediate differentiated goods produced in two successive stages. We introduce shift working disutility that raises night wage and firms that “virtually” outsource foreign labor. We found that firms only outsource if outsourcing costs are relatively low and shift disutility is high. When outsourcing occurs, it generates the highest level of welfare among production modes. Intermediate values of shift working disutility generate the lowest level of welfare. Outsourcing and domestic labor are substitutes at the firm level and complements at the economy level.

The costs of time and distance have remarkably been reduced because of the recent developments in information and communications technology (ICT). Internet, for instance, allows the instantaneous exchange of information by e-mail between people located thousands of miles away from each other. Such technology creates the possibility of trade in services that take advantage of differences in time zones. For example, when the workday ends to American workers, it starts to Indian workers. If there are efficient communications networks linking these two countries, services, such as call centers, can be provided to the American market during the night by Indian workers at their normal working hours, and vice versa. If wages are sufficiently cheap in India, call centers providing services 24 h a day in the US may opt for outsourcing such services from India and reduce costs.2 Likewise, production that would take two normal working days in the US might take only one day if half of the work is outsourced from a country located in a different time zone. The use of outsourcing at industries supplying 24-hour services, however, is not limited to call centers, an industry characterized by intensive use of unskilled labor. The health care industry has used outsourcing as a way to cut costs and cover shortage of specialized labor. Hospitals have increasingly outsourced medical services during the night or weekend (when costs are higher) to English-speaking countries located at different time zones such as Australia, Malaysia, India and South Africa.3 Also, in the electronics industry, some chip manufacturers keep global 24-hour chip design systems with engineering teams located in different parts of the globe such as the US, India and Europe in order to respond to rapid changes in demand and cut costs. Each team works at its normal working hours, but the system works 24 h a day.4 In principle, all services that do not require the presence of labor (skilled or unskilled) at the location of supply and present higher costs during the night have the possibility of being outsourced through communications networks. That applies to online schools for language teaching, media companies for supply of international news or firms in the hospitality industry for online reservations, etc.

The role of time zones in international trade has recently being focused in the literature as a new phenomenon. There is, however, an inherent difficulty in introducing time (not in the dynamic sense) into formal models. This paper aimed at introducing time in the consumption side so as to analyze the effects of time in labor markets and industries that make use of time differences. We built a trade model with two identical countries located in different time zones, a monopolistically competitive sector, and communications network services that enable countries to trade with each other and “virtually” outsource labor from other countries. We introduced shift working disutility such that night-shift workers are paid a shift premium that raises production costs. Firms take advantage of time differences to decrease marginal costs by outsourcing foreign labor but have to pay extra fixed costs in order to do so. We concluded that outsourcing takes place only under certain conditions and it generates higher welfare levels than other production modes. Specifically, firms choose to outsource when the relative cost of outsourcing is low and the shift disutility is high. Generally, the higher the shift working disutility is, the lower is welfare under domestic production. Above a certain level of shift disutility, however, firms shift production to outsourcing and welfare reaches a higher level, which is independent of the level of shift disutility. Intermediate values of disutility in which firms have no incentive to outsource generates the lowest welfare level and may be immune to reduction of outsourcing costs.