The sector bias of international outsourcing : implications for industrialized economies

This cumulative thesis includes four manuscripts investigating different implications of the internationalization of production. While International Outsourcing attracted huge attention within the last decade, the sector bias of International Outsourcing still provides several gaps for theoretical as well as empirical research. This theses tries to contribute to fill some of these gaps. The first manuscript empirically investigates measurement differences of International Outsourcing and its effects on labor market estimation results. The manuscript "The Elasticity of Substitution and the Sector Bias of International Outsourcing ... provides a formal model analyzing general equilibrium effects of International Outsourcing. Since there is no empirical evidence supporting the result that the wage gap between high and low skilled labor can indeed decrease if outsourcing takes place in relative low skill intensive industries, the manuscript "International Outsourcing and the Sector Bias ... contributes to fill this gap. The fourth manuscript provides a formal model and empirical evidence of the implications of International Outsourcing when taking place in industries characterized by low skilled wage rigidities. As the results show, a smaller increase in relative high skill wages has to be bought dearly with an increase in low skilled unemployment.