This paper concerns public input provision as an instrument for redistribution under international outsourcing by using … the provision of public input goods in response to international outsourcing, and (ii) whether international outsourcing … justifies policy cooperation. If the public input good is substitutable for (complementary with) outsourcing in terms of the …

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 …

Nash wage bargaining and flexible outsourcing. A revenue-neutral increase in the wage tax progression will decrease the … negotiated wage rate, increase domestic labor demand and decrease international outsourcing. In the presence of wage tax … exemption, a lower payroll tax and a higher wage tax will increase domestic labor demand and decrease international outsourcing …

abroad, and where outsourcing is substitutable for domestic low-ability labor. Our results show that the incentives for the … unemployment also constitutes an incentive to implement a tax on outsourcing. Without a direct instrument for taxing outsourcing …, the government may reduce the amount of resources spent on outsourcing by increased provision of the public input good …

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 …