Basu, Arnab K.; Chau, Nancy H.; Soundararajan, Vidhya - 2019
Labor market subcontracting is a global phenomenon. This paper presents a theory of wage fairness in a subcontracted … subcontractor-mediated hires. We show that subcontracting derives its appeal from a downward revision of workers' fair wage demand … when producers delegate employment decisions down the supply chain. Furthermore, subcontracting creates a holdup problem …