a simple model of employment outsourcing, the primary implication of which is that firms will respond to externally … imposed firing costs by outsourcing positions requiring the least firm-specific skills rather than those with the highest …

Outsourced workers experience large wage declines, yet domestic outsourcing may raise aggregate productivity. To study … wage premia. Second, outsourcing raises output at the firm level. Third, contractors endogenously locate at the bottom of … the job ladder, implying that outsourced workers receive lower wages. Using firm-level instruments for outsourcing and …

analysis of our testable predictions using pharmaceutical data concerning patents, patent expiration, and outsourcing at …

We develop a theory of outsourcing in which there is market power in one factor market (labor) and no market power in a … show there is always outsourcing in the market allocation when a friction limiting outsourcing is not too big. The key … equilibria that vary in the degree of outsourcing. Across these equilibria, wages are lower the greater the degree of outsourcing …