Distant Labour Supply, Skills and Induced Technical Change

26 Pages Posted: 18 May 2006

See all articles by Ashima Goyal

Ashima Goyal

Indira Gandhi Institute of Development Research (IGIDR)

Date Written: November 22, 2006


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: IInternet and communication technology, induced technological change, relative factor supplies, labour skills

JEL Classification: O31, O14, J61

Suggested Citation

Goyal, Ashima, Distant Labour Supply, Skills and Induced Technical Change (November 22, 2006). Available at SSRN: https://ssrn.com/abstract=903028 or http://dx.doi.org/10.2139/ssrn.903028

Ashima Goyal (Contact Author)

Indira Gandhi Institute of Development Research (IGIDR) ( email )

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