OFFSHORING PROMPTS HIGH QUALITY LABOUR MARKETS

I consider offshoring in the low-technology and high-technology sectors in a host country. I build a model in which the occurrence of offshoring is determined by both the skill level of unskilled workers and the level of offshoring facilitators'. Offshoring factilitators are factors or activities that promote offshoring in the high-technology sector, such as technological advancement, economic integration, services liberalization and harmonization of rules and regulations. If the level of offshoring facilitators is low, a rise in the skill level can attract offshoring to the low-technology sector but not to the high-technology sector. A rise in the level of offshoring facilitators can attract offshoring to the high-technology sector. Because offshoring in the high-technology sector provides jobs to skilled workers, it also improves the quality of labour markets. I discuss services liberalization in ASEAN and examine a case study of Thailand as the host country in the global economy.