, it delivers an expression for the employment rate and as side-products, a measure of the unemployment rate and the size … rationalizes differences in employment rates: in the U.S., we find a market productivity premium of +30% and market frictions of …

through outsourcing. The objective is to raise domestic employment. Given that many of the important international markets … that even if a unilateral tax by the US raises its employment, this may turn around in a Nash policy equilibrium, where the … in recent years) and increased product differentiation tend to worsen the employment effects of the outsourcing tax. The …

unemployment decreases upon offshoring in the presence of perfect intersectoral labor mobility. If, as a result, labor moves to the … intersectoral labor mobility, unemployment in the offshoring sector can rise, with an unambiguous unemployment reduction in the non-offshoring …

decreases. Next we allow for offshoring of unskilled jobs in our model, and we find that, as a result, it becomes more likely … that the fair-wage constraint binds. Offshoring of unskilled jobs always leads to an increase in skilled wage, a decrease … adverse impact of offshoring on unskilled unemployment. The unskilled wage can increase or decrease as a result of offshoring. …

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 … externalities can help explain the dynamic process of offshoring, where the most productive firms offshore first and the others …

therefore, in the unemployment rate. Furthermore, a firm can increase its domestic employment through offshoring. Also, such a …In this paper, in order to study the impact of offshoring on sectoral and economywide rates of unemployment, we … offshoring. This result can be understood to arise from the productivity enhancing (cost reducing) effect of offshoring. If the …