Job Market Paper:

"Task Trade, Wages, and Transportation Costs"

Abstract: This work asks how falling trade costs affect wages and how this differs for workers in offshorable versus less offshorable jobs? To address this issue empirically, I create new measures of transportation costs for imports which provide exogenous, industry level variation in costs. I adopt the insight from earlier literature on task based labor markets that the specific tasks performed at various jobs make some occupations easier to offshore than others. I develop new measures of transport costs and offshorability which I use to test the prediction that falling transport costs decrease the relative wage of highly offshorable occupations by exposing them to foreign competition. I find that established measures of offshorability based on face-to-face content of jobs produce counterintuitive results. I create a new measure of offshorability which also incorporate the concept of routineness. This index leads to more sensible estimates, suggesting that declining transportation costs from 1989-2003 reduced the relative wages of offshorable workers by about 5%. My results indicate that commonly used measures that focus on face-to-face job requirements miss an important dimension of offshorability. I show that one of the most commonly cited measures of offshorability is incomplete and provide another measure which performs better empirically. An advantage of my approach is that by focusing on transport costs, I address endogeneity issues that plague earlier work on the effect of trade on wages.

Working Papers:

“Industry Level Transport Costs as a Determinant of Trade”
(June 2011)

“Household Stability and the Child Support Grant in South Africa”
(December 2009)

Work in Progress:

“Agricultural Trade Policy and Groundwater Levels,” joint with Sheetal Sekhri