IDEAS home Printed from https://ideas.repec.org/a/jed/journl/v37y2012i2p109-138.html
   My bibliography  Save this article

Immigration Versus Outsourcing: A Developing Country¡¯S View

Author

Listed:
  • SIMONTINI DAS

    (Rabindra Bharati University)

  • AJITAVA RAYCHAUDHURI

    (Jadavpur University)

  • SAIKAT SINHA ROY

    (Jadavpur University)

Abstract

This paper provides a comparative study between temporary immigration policy and product outsourcing process, from the low-income developing country¡¯s point of view, which is supply side constrained by the availability of skilled labour. A two-country general equilibrium model establishes an inverse relationship between temporary immigration quota and product outsourcing. Though temporary immigration quota enhances world welfare and the developed country welfare, its impact on welfare level of the developing country is uncertain. In the empirical part, a panel data analysis shows that real consumption level of a set of developing countries increases with an increase in product outsourcing, given an inverse relationship between product outsourcing and temporary immigration policy.

Suggested Citation

  • Simontini Das & Ajitava Raychaudhuri & Saikat Sinha Roy, 2012. "Immigration Versus Outsourcing: A Developing Country¡¯S View," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 37(2), pages 109-138, June.
    • Handle: RePEc:jed:journl:v:37:y:2012:i:2:p:109-138
    as

    Download full text from publisher

    File URL: http://www.jed.or.kr/full-text/37-2/5.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sherif Khalifa & Evelina Mengova, 2010. "Offshoring And Wage Inequality In Developing Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 35(3), pages 1-42, September.
    2. Cohen-Goldner, Sarit & Paserman, M. Daniele, 2011. "The dynamic impact of immigration on natives' labor market outcomes: Evidence from Israel," European Economic Review, Elsevier, vol. 55(8), pages 1027-1045.
    3. Subhayu Bandyopadhyay & Howard J. Wall, 2010. "Immigration and Outsourcing: A General‐Equilibrium Analysis," Review of Development Economics, Wiley Blackwell, vol. 14(3), pages 433-446, August.
    4. Jiong Tu, 2007. "The Impact of Immigration on the Labour Market Outcomes of Native-born Canadians," Social and Economic Dimensions of an Aging Population Research Papers 216, McMaster University.
    5. Jansen, Marion & Piermartini, Roberta, 2005. "The Impact of Mode 4 Liberalization on Bilateral Trade Flows," CEPR Discussion Papers 5382, C.E.P.R. Discussion Papers.
    6. Subhayu Bandyopadhyay & Sugata Marjit & Lei Yang, 2010. "An evaluation of the employment effects of barriers to outsourcing," Working Papers 2010-030, Federal Reserve Bank of St. Louis.
    7. Michael Engman, 2007. "Expanding International Supply Chains: The Role of Emerging Economies in Providing it and Business Process Services," OECD Trade Policy Papers 52, OECD Publishing.
    8. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2005. "A Meta‐Analytic Assessment of the Effect of Immigration on Wages," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 451-477, July.
    9. Peter E. Robertson, 2008. "The Biggest Loser: Education and Skilled Immigration in Australia," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 15(1), pages 85-98.
    10. Hartmut Egger & Udo Kreickemeier, 2017. "International Fragmentation: Boon or Bane for Domestic Employment?," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 9, pages 237-263, World Scientific Publishing Co. Pte. Ltd..
    11. Giorgio Barba Navaretti & Giuseppe Bertola & Alessandro Sembenelli, 2008. "Offshoring and Immigrant Employment: Firm-level Theory and Evidence," Development Working Papers 245, Centro Studi Luca d'Agliano, University of Milano.
    12. Jean, Sébastien & Jiménez, Miguel, 2011. "The unemployment impact of immigration in OECD countries," European Journal of Political Economy, Elsevier, vol. 27(2), pages 241-256, June.
    13. repec:wvu:wpaper:05-08 is not listed on IDEAS
    14. Koskela, Erkki & Stenbacka, Rune, 2010. "Equilibrium unemployment with outsourcing and wage solidarity under labour market imperfections," European Economic Review, Elsevier, vol. 54(3), pages 376-392, April.
    15. Koskela, Erkki & Stenbacka, Rune, 2009. "Equilibrium unemployment with outsourcing under labour market imperfections," Labour Economics, Elsevier, vol. 16(3), pages 284-290, June.
    16. Arndt, Sven W., 1997. "Globalization and the open economy," The North American Journal of Economics and Finance, Elsevier, vol. 8(1), pages 71-79.
    17. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    18. Alexander Hijzen & Holger Görg & Robert C. Hine, 2005. "International Outsourcing and the Skill Structure of Labour Demand in the United Kingdom," Economic Journal, Royal Economic Society, vol. 115(506), pages 860-878, October.
    19. Kalyan K. Sanyal & Ronald W. Jones, 2018. "The Theory of Trade in Middle Products," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 13, pages 203-231, World Scientific Publishing Co. Pte. Ltd..
    20. Dibyendu Maiti & Sugata Marjit, 2011. "Subcontracting, R&D And Labour Productivity: A Theoretical Explanation," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 36(3), pages 1-24, September.
    21. Sanyal, Kalyan K, 1983. "Vertical Specialization in a Ricardian Model with a Continuum of Stages of Production," Economica, London School of Economics and Political Science, vol. 50(197), pages 71-78, February.
    22. Jonathan Wadsworth & Augustin de Coulon, 2008. "On the Relative Gains to Immigration: A Comparison of the Labour Market Position of Indians in the USA, the UK and India," CEP Discussion Papers dp0851, Centre for Economic Performance, LSE.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Horgos Daniel, 2012. "International Outsourcing and Wage Rigidity," Global Economy Journal, De Gruyter, vol. 12(2), pages 1-28, June.
    2. Koskela, Erkki & Stenbacka, Rune, 2010. "Equilibrium unemployment with outsourcing and wage solidarity under labour market imperfections," European Economic Review, Elsevier, vol. 54(3), pages 376-392, April.
    3. Biswajit Mandal & Sugata Marjit & Noritsugu Nakanishi, 2018. "Outsourcing, factor prices and skill formation in countries with non-overlapping time zones," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(2), pages 289-304, August.
    4. Michael C. Burda & Barbara Dluhosch, 2002. "Fragmentation, Globalisation and Labour Markets," International Economic Association Series, in: David Greenaway & Richard Upward & Katharine Wakelin (ed.), Trade, Investment, Migration and Labour Market Adjustment, chapter 4, pages 47-65, Palgrave Macmillan.
    5. Lukas Mohler & Rolf Weder & Simone Wyss, 2018. "International trade and unemployment: towards an investigation of the Swiss case," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 154(1), pages 1-12, December.
    6. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
    7. Nowak, Jean-Jacques & Petit, Sylvain & Sahli, Mondher, 2010. "Tourism and Globalization: The International Division of Tourism Production," MPRA Paper 75083, University Library of Munich, Germany.
    8. Horgos, Daniel, 2009. "Labor market effects of international outsourcing: How measurement matters," International Review of Economics & Finance, Elsevier, vol. 18(4), pages 611-623, October.
    9. Jan König & Erkki Koskela, 2013. "The Role of Profit Sharing in Dual Labour Markets with Flexible Outsourcing," LABOUR, CEIS, vol. 27(4), pages 351-370, December.
    10. Hartmut Egger & Udo Kreickemeier, 2017. "International Fragmentation: Boon or Bane for Domestic Employment?," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 9, pages 237-263, World Scientific Publishing Co. Pte. Ltd..
    11. João Amador & Sónia Cabral, 2014. "Global Value Chains: Surveying Drivers, Measures and Impacts," Working Papers w201403, Banco de Portugal, Economics and Research Department.
    12. Tobias Brändle & Andreas Koch, 2015. "Offshoreability and wages. Evidence from German task data," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(2), pages 189-216, June.
    13. Ronald Bachmann & Sebastian Braun, 2011. "The Impact Of International Outsourcing On Labour Market Dynamics In Germany," Scottish Journal of Political Economy, Scottish Economic Society, vol. 58(1), pages 1-28, February.
    14. Simonetta LONGHI & Peter NIJKAMP & Jacques POOT, 2008. "Meta-Analysis Of Empirical Evidence On The Labour Market Impacts Of Immigration," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 27, pages 161-191.
    15. Koskela, Erkki & Poutvaara, Panu, 2008. "Outsourcing and Labor Taxation in Dual Labor Markets," IZA Discussion Papers 3522, Institute of Labor Economics (IZA).
    16. Biswajit Mandal & Sujata Ghosh, 2020. "Communication Cost, Skilled-Unskilled Wage, and Informality," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 18(4), pages 927-939, December.
    17. Koskela, Erkki & Poutvaara, Panu, 2008. "Flexible Outsourcing and the Impacts of Labour Taxation in European Welfare States," IZA Discussion Papers 3699, Institute of Labor Economics (IZA).
    18. Joan Muysken & Ehsan Vallizadeh & Thomas Ziesemer, 2015. "Migration, Unemployment, and Skill Downgrading," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 403-451, April.
    19. Rosario Crinò, 2009. "Offshoring, Multinationals And Labour Market: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 197-249, April.
    20. Michael C. Burda & Barbara Dluhosch, 2002. "Cost Competition, Fragmentation, and Globalization," Review of International Economics, Wiley Blackwell, vol. 10(3), pages 424-441, August.

    More about this item

    Keywords

    Immigration; Outsourcing; Intermediate Input; Consumption; Panel Analysis;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • F2 - International Economics - - International Factor Movements and International Business
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jed:journl:v:37:y:2012:i:2:p:109-138. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sung Y. Park (email available below). General contact details of provider: https://edirc.repec.org/data/eccaukr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.