The International Price of Remote Work

By: Agostina Brinatti, Alberto Cavallo, Javier Cravino and Andres Drenik

Format:Print
| Language:English
| Pages:54

Abstract

We study how the price of remote work is determined in a globalized labor market using data from a large web-based job platform, where workers from around the world compete for remote jobs. Despite the global nature of the platform, we find that remote wages are higher for workers in regions with higher income per-capita. This correlation is not accounted for by differences in workers' observable characteristics, occupations, or differences in the employers' locations. Instead, data on wage-histories indicate that remote wages are partly determined by the conditions that workers face in their local labor markets. We also show that remote wages expressed in local currency move strongly with the dollar exchange rate of the worker's country and are highly sensitive to foreign competition. Finally, we identify occupations at high-risk of being offshored based on the prevalence of cross-border contracts.

Keywords

Remote Work; Exchange Rates; Purchasing Power Parity; Offshoring And Outsourcing; Macroeconomics; Developing Countries and Economies; Wages; Trade; Globalization; Marketplace Matching; Currency Exchange Rate; Service Industry; Web Services Industry; Technology Industry

Citation

Brinatti, Agostina, Alberto Cavallo, Javier Cravino, and Andres Drenik. "The International Price of Remote Work." NBER Working Paper Series, No. 29437, October 2021. (Revised November 2022.)