We evaluate the effects of international outsourcing and labor taxation on wage formation and equilibrium unemployment … in dual labor markets. Outsourcing promotes wage dispersion between the high-skilled and low-skilled workers. Higher … domestic low-skilled wage tax, higher payroll tax and lower wage tax exemption increase optimal outsourcing. Outsourcing will …

We analyze the following questions associated with outsourcing and profit sharing under imperfect labour markets. How … does strategic outsourcing influence wage formation, profit sharing and employee effort when firms commit to optimal profit … sharing before wage formation or decide for profit sharing after wage formation. What is the relationship between outsourcing …

We show that, even with flexible domestic wages, international outsourcing may worsen the welfare of the home country … and reduce the profits of all firms. If wages are rigid, outsourcing is welfare-improving if and only if the sum of the … welfare. We also extend the model to a two-period framework. Delaying outsourcing can be gainful because the fixed cost of …

We analyze a model that focuses on the export/outsource decision. Outsourcing has the advantage of providing better … technology embodied in the local capital. The decision of whether to offer an outsourcing contract weighs these two effects … against each other. The host country accepts the outsourcing contract if the higher price they pay for the outsourced good is …

production to the other. In the country whose firms outsource production abroad, the government will respond to outsourcing by … the absence of outsourcing. The tax policy response by the government in the country that receives foreign production …

distinguish between domestic and foreign sourcing, as well as between outsourcing and vertical integration. A firm’s choice is …

We study ex post outsourcing of production in an imperfectly discriminating contest, interpreted here as a research … tournament or a procurement contest for being awarded some production contract. We find that the possibility of outsourcing …, outsourcing reduces the procurement costs of inducing a given level of effort if the contest organizer can collect entry fees …

This paper shows that outsourcing of parts of the workforce in unionized firms leads to wage moderation and as long as … direct substitution effect so that domestic employment increases in unionized firms as outsourcing costs fall. This does not … exemption and the unemployment benefit payments affect domestic wage setting in the same way as in the absence of outsourcing …

We study the various consequences of and the incentives for outsourcing. We argue that the wage elasticity of labour … demand increases as a function of the share of outsourcing, which is a result consistent with existing empirical research …. Furthermore, we show that a production mode with a higher proportion of outsourcing activity reduces the negotiated wage in the …