Research / BFI Working PaperOct 19, 2021

Telemigration and Development: On the Offshorability of Teleworkable Jobs

Richard Baldwin, Jonathan Dingel

The Covid-19 pandemic has introduced huge numbers of employers and employees to remote work. How many of these newly remote jobs will go overseas? We offer a rough quantification based on two observations: 1) offshore work is trade in services, and 2) the number of telemigrants is the volume of this trade divided by the average wage. Combining these with gravity-model estimates, we can roughly predict the number of new telemigrants that would arise from lower barriers to trade in services. Telemigration seems unlikely to be transformative when it comes to the development paths of most emerging economies. The baseline service trade flows are modest, and the standard gravity model restricts modest changes to have modest impacts. There are no tipping points in structural gravity models. Finally, we propose a simple model of telemigration in which small changes can have large consequences. The key is to assume that latent comparative advantage takes a different shape than typically assumed in quantitative trade models. Given this, small changes in trade costs can generate large and asymmetric increases in the exports of service tasks from low-wage nations.

More Research From These Scholars

BFI Working Paper Dec 1, 2018

Spatial Correlation, Trade, and Inequality: Evidence from the Global Climate

Jonathan Dingel, Solomon Hsiang, Kyle C. Meng
Topics:  Uncategorized
BFI Working Paper Mar 21, 2019

Cities, Lights, and Skills in Developing Economies

Jonathan Dingel, Antonio Miscio, Donald R. Davis
Topics:  Technology & Innovation
BFI Working Paper Jan 29, 2021

Measuring Movement and Social Contact with Smartphone Data: A Real-time Application to COVID-19

Victor Couture, Jonathan Dingel, Allison Green, Jessie Handbury, Kevin R. Williams
Topics:  COVID-19