Off-Shoring Of White Collar Employment

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					                      Off-Shoring Of White Collar Employment

                            CP 229 Tuesdays, 12:30-3:30pm
                               Room 106 Wurster Hall
                                     CCN 13513

                   Instructors: Stephen Cohen and Cynthia Kroll.
                           Preliminary Seminar Schedule

Note: This schedule includes a sampling of reading materials that will be included in the
earlier class sessions. Additional reading will be assigned throughout the semester.

August 30:     Introduction and Organization
               Meet one another and discuss the organization of the seminar. Short
               introductions touching on interest in, and approach to, seminar subject.
               Preliminary discussion of topics for each meeting and selection of topics
               for presentation

September 6: Data and measurement: Is Off-shoring a big deal? A little puff?
Catastrophic? A conspiracy by Chickens Little, like Y2K ? Any/All of the above?
Presentation: Kroll
               Data sources and their applications to non-goods trade
               Estimating job impacts
               Modeling and black boxes--how do “experts” construct their
                  quantitative estimates?
              Assigned Readings:
                  Bardhan, A.D. and C.A. Kroll. 2003. "The New Wave of
                     Outsourcing." Research Report, Fisher Center for Real Estate and
                     Urban Economics.
                  McKinsey Global Instititute. Offshoring: Is It a Win-Win Game?
                     2003. San Francisco, McKinsey & Co. (Available from course
                     instructors in a pdf file.)
                  “Forrester Finds Near-Term Growth Of Offshore Outsourcing
                     Accelerating,” Forrester Research News Release (Available from
                     course instructors in a pdf file.)
                  Amiti, Mary and Wei, Shang-Jin. Fear of Service Outsourcing: Is It
                  Justified? 2004. Cambridge, National Bureau of Economic Research.
                  NBER Working Paper Series.

September 13: McKinsey analyst(s) will speak about their recent study--The Emerging
Global Labor Market.
Presentation: Martha Laboissiere, McKinzie Global Institute
               Assigned reading: Portions of The Emerging Global Labor Market (all
               introductory and executive summary material, each synthesis, and all of
               Part III--How Supply and Demand for Offshore Talent Meet.

September 20: Even if we can’t quite measure it, surely we can understand it. Underlying
              (perhaps undermining) theories of international trade.
Presentation: The instructors, or guest instructor

                  The Bhagwati/Samuelson debate
                         Samuelson, P.A. 2004. "Where Ricardo and Mill Rebut and
                             Confirm Arguments of Mainstream Economists Supporting
                             Globalization." Journal of Economic Perspectives. 18
                         Bhagwati, J., A. Panagariya, and T.N. Srinivasa. forthcoming.
                             "The Muddles over Outsourcing." Journal of Economic
                             Perspectives. 18 (4): 93-114.
                  Comparative advantage, competitive advantage, and what these mean
                   and how these are achieved
                         Readings TBA, most likely including brief selections from
                         some classical texts.

Beginning September 28th, most sessions will begin with a student presentation using
student selected (and circulated materials), although we may occasionally have guest
speakers. Instructors will recommend some readings for these sessions, and the
student(s) in charge of the topic will identify and assign additional material. A
preliminary, and by no means exhaustive, set of topics is listed here. Students will have
the opportunity to express their preferences for topics and dates during the first two class
sessions, or to suggest alternative topics. Please note that THERE WILL BE NO CLASS
MEETING OCTOBER 4TH; during that week faculty will meet with students
individually, or in teams.

Some Additional topics:

1)     Technological change in a global economy
        How have changes in communications affected agglomeration economies?
        How, if at all, have these changes affected theories of location such as product
          cycle theory and theories of agglomeration, and the bases of our
          understanding of how firms operate in a global economy?

2)     The Microeconomics of offshoring and outsourcing
        What are the basic economics of off-shoring for selected (and in some way
          representative) business processes?
        What decision-making models are used for such calculations?
        What factors are typically omitted from such models but in your view ought to
         be taken into account? Why? How?
        Is the decision to locate production abroad qualitatively different from the
         decision to locate at a distant domestic site, from the point of view of the

3)   Productivity and wage levels
      Does offshoring differ in any real way from automation as far as labor market
        impacts are concerned?
      Productivity gains versus wage change--is offshoring reducing labor’s ability
        to gain from productivity growth?
      Are there any natural limits, or at least factors to slow, the phenomenon, such
        as off shore labor availability, managerial costs, or various “frictions” of
        adjusting to multilocational operations?

4)   Distributional issues--who gains, who pays the costs
      Are occupational skills in white-collar jobs more easily transferable than
        manufacturing skills? What are the implications for offshoring impacts?
      How are impacts spread geographically--will white-collar job centers feel
        impacts similarly to manufacturing centers two decades ago?
      Is offshoring contributing to a bifurcation of the labor force? A layer-cake
        model of the labor force? A “marble-cake model?

5)   White-collar globalization from the receiving end
      How does white collar offshoring shape economic development in “host”
      Will the spread of “middle-class” and higher-wage jobs change politics in
       those nations?
      How does the structure of white-collar offshoring compare with more
       traditional offshoring of industrial processes and employment?

6)   Moving up the value chain
      Is the offshoring occurring now a repeat of the offshoring of manufacturing
       jobs in the 1980s, or is it qualitatively different?
      Are we shipping out our capacity for new innovation? If so how, in what
      Is this a critical step in maintaining our innovative edge, especially with
       regard to growing markets in Asia?

7)   The venture capital role
      What role is venture financing playing in the globalization of production
      What types of white-collar jobs are targeted for offshoring in this process?

8)   The Manufacturing Parallel
          How did globalization of US manufacturing occur
          What have been the consequences of US manufacturing globalization?
          Will services offshoring take a similar path? What is the same? What differs?

9)     Changing Labor Paradigms
        What occupations are most likely to be offshored
        What skill levels are being offshored?
        If higher skill levels are being offshored, what are the implications for
          employment opportunities in the US, for the US management structure?
        What would be the implications for the traditional advice, for both individuals
          and policy makers: “education is the response”.

10)    Politics and policy
        What are the political debates that have surrounded white-collar offshoring?
        Policy prescriptions at the state and federal level--what would an effective
           response look like?
        Is more education the answer? At what level? For whom?
        If not education, what are other possible policy responses?

11)    Protectionism
       Suppose the US, or another nation, decided to opt for protectionism. We know
       how to implement protectionist policies for ball bearings, wheat or cars: tariffs,
       quotas, standards, etc.
        How can this be done for the output of off-shored white-collar tasks?
        What are the economic implications of potential policies?

Class Assignments:

Required assignments for the class include:

1) Lead one session of the seminar. (This might be a full class session or part of a
scheduled session). It includes defining the topic, identifying reading material in advance,
making an initial presentation and leading subsequent discussion.

2) Preparation of an annotated a dossier on the seminar subject.

3) Discussant role in one session: Come prepared to add to topic discussion with
comments on readings, research questions, or other thoughts to help direct discussion.

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