The Elasticity of Substitution and the Sector Bias of International Outsourcing

<table class="table-group" id="tab4"><tr><td><table class="table"><tr><td class="thead-hr" colspan="5"><hr/></td></tr><tr class="thead"><td align="left" rowspan="2">  Scenario</td><td align="center" colspan="2"> Low-skill intensive Industry</td><td align="center" colspan="2">High-skill intensive Industry</td></tr><tr class="thead"><td align="center">Low-skill part</td><td align="center">High-skill part</td><td align="center">Low-skill part</td><td align="center">High-skill part</td></tr><tr><td class="thead-hr" colspan="5"><hr/></td></tr><tr><td align="left"> Relative wages of the high-skilled</td><td align="center"><span style="width: 12.45px;"><svg height="12.9125" id="M193" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></span></td><td align="center"><span style="width: 12.45px;"><svg height="12.9125" id="M194" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></span></td><td align="center"><span style="width: 12.45px;"><svg height="12.9125" id="M195" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></span></td><td align="center"><span style="width: 12.45px;"><svg height="12.9125" id="M196" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></span></td></tr><tr><td align="left">Relative labor unit requirements of the high-skilled</td><td align="center"><span style="width: 12.45px;"><svg height="12.9125" id="M197" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></span></td><td align="center"> (<svg height="17.575001" id="M198" style="vertical-align:-3.25793pt" version="1.1" viewbox="0 0 89.487503 17.575001" width="89.487503" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,17.575)">
<g transform="translate(72,-57.94)">
<text transform="matrix(1,0,0,-1,-71.95,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">𝜎</tspan>
</text>
<text transform="matrix(1,0,0,-1,-64.61,66.24)">
<tspan style="font-size: 8.75px; " x="0" y="0">𝑌</tspan>
</text>
<text transform="matrix(1,0,0,-1,-54.21,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">&gt;</tspan>
<tspan style="font-size: 12.50px; " x="12.040389" y="0">Δ</tspan>
</text>
<text transform="matrix(1,0,0,-1,-33.14,58.11)">
<tspan style="font-size: 8.75px; " x="0" y="0">Θ</tspan>
</text>
<text transform="matrix(1,0,0,-1,-26.32,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">/</tspan>
<tspan style="font-size: 12.50px; " x="3.4758339" y="0">𝜃</tspan>
</text>
<text transform="matrix(1,0,0,-1,-16.3,58.11)">
<tspan style="font-size: 8.75px; " x="0" y="0">𝑋</tspan>
<tspan style="font-size: 8.75px; " x="6.9140801" y="0">𝐻</tspan>
</text>
</g>
</g>
</svg>) <svg height="12.9125" id="M199" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></td><td align="center"> (<svg height="17.575001" id="M200" style="vertical-align:-3.25793pt" version="1.1" viewbox="0 0 85.175003 17.575001" width="85.175003" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,17.575)">
<g transform="translate(72,-57.94)">
<text transform="matrix(1,0,0,-1,-71.95,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">𝜎</tspan>
</text>
<text transform="matrix(1,0,0,-1,-64.61,66.24)">
<tspan style="font-size: 8.75px; " x="0" y="0">𝑋</tspan>
</text>
<text transform="matrix(1,0,0,-1,-53.2,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">&gt;</tspan>
<tspan style="font-size: 12.50px; " x="12.027886" y="0">Δ</tspan>
</text>
<text transform="matrix(1,0,0,-1,-32.14,58.11)">
<tspan style="font-size: 8.75px; " x="0" y="0">Θ</tspan>
</text>
<text transform="matrix(1,0,0,-1,-25.32,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">/</tspan>
<tspan style="font-size: 12.50px; " x="3.4758339" y="0">𝜃</tspan>
</text>
<text transform="matrix(1,0,0,-1,-15.29,58.11)">
<tspan style="font-size: 8.75px; " x="0" y="0">𝑌</tspan>
<tspan style="font-size: 8.75px; " x="4.6823201" y="0">𝐿</tspan>
</text>
</g>
</g>
</svg>) <svg height="12.9125" id="M201" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></td><td align="center"><span style="width: 12.45px;"><svg height="12.9125" id="M202" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></span></td></tr><tr><td align="left"></td><td align="center"></td><td align="center">(<svg height="13.6875" id="M203" style="vertical-align:-0.13794pt" version="1.1" viewbox="0 0 45.162498 13.6875" width="45.162498" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,13.6875)">
<g transform="translate(72,-61.05)">
<text transform="matrix(1,0,0,-1,-71.95,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">𝜎</tspan>
</text>
<text transform="matrix(1,0,0,-1,-64.61,66.24)">
<tspan style="font-size: 8.75px; " x="0" y="0">𝑌</tspan>
</text>
<text transform="matrix(1,0,0,-1,-54.21,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">=</tspan>
<tspan style="font-size: 12.50px; " x="12.040389" y="0">1</tspan>
</text>
</g>
</g>
</svg>)</td><td align="center">(<svg height="13.6875" id="M204" style="vertical-align:-0.13794pt" version="1.1" viewbox="0 0 46.424999 13.6875" width="46.424999" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,13.6875)">
<g transform="translate(72,-61.05)">
<text transform="matrix(1,0,0,-1,-71.95,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">𝜎</tspan>
</text>
<text transform="matrix(1,0,0,-1,-64.61,66.24)">
<tspan style="font-size: 8.75px; " x="0" y="0">𝑋</tspan>
</text>
<text transform="matrix(1,0,0,-1,-53.2,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">=</tspan>
<tspan style="font-size: 12.50px; " x="12.027886" y="0">1</tspan>
</text>
</g>
</g>
</svg>)</td><td align="center"></td></tr><tr><td align="left" rowspan="2">Output</td><td align="center">High-skill intensive Industry <svg height="12.9125" id="M205" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></td><td align="center">High-skill intensive Industry <svg height="12.9125" id="M206" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></td><td align="center">High-skill intensive Industry <svg height="12.9125" id="M207" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></td><td align="center">High-skill intensive Industry <svg height="12.9125" id="M208" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></td></tr><tr><td align="center">Low-skill intensive Industry <svg height="12.9125" id="M209" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></td><td align="center">Low-skill intensive Industry <svg height="12.9125" id="M210" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></td><td align="center">Low-skill intensive Industry <svg height="12.9125" id="M211" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></td><td align="center">Low-skill intensive Industry <svg height="12.9125" id="M212" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></td></tr><tr><td align="left"></td><td align="center"></td><td align="center">(<svg height="13.6875" id="M213" style="vertical-align:-0.13794pt" version="1.1" viewbox="0 0 45.162498 13.6875" width="45.162498" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,13.6875)">
<g transform="translate(72,-61.05)">
<text transform="matrix(1,0,0,-1,-71.95,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">𝜎</tspan>
</text>
<text transform="matrix(1,0,0,-1,-64.61,66.24)">
<tspan style="font-size: 8.75px; " x="0" y="0">𝑌</tspan>
</text>
<text transform="matrix(1,0,0,-1,-54.21,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">=</tspan>
<tspan style="font-size: 12.50px; " x="12.040389" y="0">1</tspan>
</text>
</g>
</g>
</svg>)</td><td align="center">(<svg height="13.6875" id="M214" style="vertical-align:-0.13794pt" version="1.1" viewbox="0 0 46.424999 13.6875" width="46.424999" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,13.6875)">
<g transform="translate(72,-61.05)">
<text transform="matrix(1,0,0,-1,-71.95,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">𝜎</tspan>
</text>
<text transform="matrix(1,0,0,-1,-64.61,66.24)">
<tspan style="font-size: 8.75px; " x="0" y="0">𝑋</tspan>
</text>
<text transform="matrix(1,0,0,-1,-53.2,61.23)">
<tspan style="font-size: 12.50px; " x="0" y="0">=</tspan>
<tspan style="font-size: 12.50px; " x="12.027886" y="0">1</tspan>
</text>
</g>
</g>
</svg>)</td><td align="center"></td></tr><tr><td align="left" rowspan="2">Employment</td><td align="center">High-skill intensive Industry <svg height="12.9125" id="M215" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></td><td align="center">High-skill intensive Industry <svg height="12.9125" id="M216" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></td><td align="center">High-skill intensive Industry <svg height="12.9125" id="M217" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></td><td align="center">High-skill intensive Industry <svg height="12.9125" id="M218" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></td></tr><tr><td align="center"> Low-skill intensive Industry <svg height="12.9125" id="M219" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></td><td align="center">Low-skill intensive Industry <svg height="12.9125" id="M220" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↑</tspan>
</text>
</g>
</g>
</svg></td><td align="center">Low-skill intensive Industry <svg height="12.9125" id="M221" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></td><td align="center">Low-skill intensive Industry <svg height="12.9125" id="M222" style="vertical-align:-1.95624pt" version="1.1" viewbox="0 0 12.45 12.9125" width="12.45" xmlns="http://www.w3.org/2000/svg">
<g transform="matrix(1.25,0,0,-1.25,0,12.9125)">
<g transform="translate(72,-61.67)">
<text transform="matrix(1,0,0,-1,-71.95,63.67)">
<tspan style="font-size: 12.50px; " x="0" y="0">↓</tspan>
</text>
</g>
</g>
</svg></td></tr><tr class="table-tr"><td colspan="5"><hr class="tbody-hr"/></td></tr></table></td></tr></table>

Sector bias of international outsourcing (theoretical results).

Economics Research International

tab4

Table 4

Table 4: The Elasticity of Substitution and the Sector Bias of International Outsourcing 