more competitive. To focus on this aspect, we analyze how flexible international outsourcing and labour taxation affect … wage formation, employment and welfare in dual domestic labour markets. Higher productivity of outsourcing, lower cost of … outsourcing and lower factor price of outsourcing increase wage dispersion between the skilled and unskilled workers. Increasing …

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 …