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 …

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

offshoring on the labor market can substantially deviate from standard neoclassical conclusions when search frictions hinder … exploiting offshoring. It implies that automation (offshoring) may reduce (raise) employment by lengthening (shortening …

We discuss the effects of low-skill offshoring on the endogenous schooling decision of workers along with the potential …-deteriorating effects of offshoring. As a result, we aim at restoring welfare by increasing the opportunity cost of staying low-skill. In … offshoring that befall those in the lowest end of the skill ladder. …

We discuss the effects of offshoring on the labor market in a matching model with endogenous adjustment of educational … skills. We carry out a comparative statics analysis and show that offshoring leads to a restructuring of the economy through … skill-biased technical change (SBTC) where overall welfare is improved. In a policy exercise we show that, if offshoring …

We present a global production sharing model that integrates the organizational choices of offshoring into the … determination of relative wages in developing countries. The model shows that offshoring through foreign direct investment … contributes more prominently than arm's length outsourcing to the demand for skill in the South, thereby increasing the relative …

evidence that suggests that the increase in non-routine cognitive workplaces is linked to the growth in outsourcing of …