Trade with Time Zone Differences: Factor Market Implications

The main purpose of this study is to illustrate, with a simple two-factor (skilled and unskilled labor) model, how a time-saving improvement in business-services trade benefitting from differences in time zones can have an impact on national factor markets. In doing so, we intend to capture the situation where the night-shift work in one country is replaced by the day-shift work in another country. In other words, we will show that, trade with time zone differences will result in shifts of the relative supplies and demands for skilled labor around the globe.