improvements in the informal sector expand both offshoring and outsourcing, and the developed nation wage must rise. When the …We present a model of offshoring of tasks to a developing nation, which is characterized by a minimum wage formal … informal sector. An improvement in the productivity in performing offshored tasks in the developing country raises offshoring …

The various channels through which a reduction in the cost of offshoring can improve wages in a developed country are … by now well understood. But does a similar reduction in the offshoring cost also benefit workers in the world's factories … in developing countries? Using a parsimonious two-country model of offshoring we find very nuanced results. These include …

We construct a model of offshoring with externalities and firm heterogeneity. Due to the presence of externalities …, temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in … an industry. Also, the initial advantage of a country as a potential host for outsourcing activities can create a lock in …

This paper studies the impact of outsourcing on individual wages in three European countries with markedly different … and construct comparable measures of outsourcing at the industry level, distinguishing outsourcing by broad region …. Estimating the same specification on different data show that there are some interesting differences in the effect of outsourcing …

). It turns out that, compared to non-offshoring firms, firms that relocated activities were larger and more productive, and … relocate, and this points to self-selection of "better" firms into offshoring. This finding is in line with results from recent … others were not. Broadly in line with hypotheses derived from the literature there is no evidence that offshoring has a …

explanation is at odds with the sequence of observed facts. We propose and model an alternative scenario in which offshoring …

to contracting firms. For this end we develop a new method for identifying outsourcing of food, cleaning, security and … growth of domestic outsourcing in Germany since the early 1990s. Event-study analyses show that wages in outsourced jobs fall … associated with outsourcing stem from a loss of firm-specific rents, suggesting that labor cost savings are an important reason …