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International Fragmentation: Boon or Bane for Domestic Employment? Author info | Abstract | Publisher info | Download info | Related research | Statistics Hartmut Egger ()
Udo Kreickemeier ()
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In this paper, we introduce the fairness approach to efficiency wages into a standard model of international fragmentation. This gives us a theoretical framework in which wage inequality and unemployment rates are co-determined and therefore the public concern can be addressed that international fragmentation and outsourcing to low wage countries lead to domestic job-losses. We develop a novel diagrammatic tool to illustrate the main labour market effects of international fragmentation. We also explore how preferences for fair wages and the size of unemployment benefits govern the employment effects of outsourcing and critically assess the role of political intervention that aims to reduce unemployment benefits under internationally fragmented production.
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number
CESifo Working Paper No. 1595.
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Date of creation: 2005Date of revision:
Handle: RePEc:ces:ceswps:_1595Contact details of provider: Postal: Poschingerstrasse 5, 81679 Munich Phone: +49 (89) 9224-0 Fax: +49 (89) 985369 Web page: http://www.cesifo.de
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Keywords: international fragmentation ; unemployment ; fair wages ; Other versions of this item:
Find related papers by JEL classification: F11 - International Economics - - Trade - - - Neoclassical Models of Trade F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Ernst Fehr & Simon Gaechter, .
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Erkki Koskela & Rune Stenbacka, 2007.
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Erkki Koskela & Rune Stenbacka, 2007.
"Equilibrium Unemployment with Outsourcing and Wage Solidarity under Labour Market Imperfections ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo Group Munich.
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Wilhelm Kohler, 2007.
"The Bazaar Effect, Unbundling of Comparative Advantage, and Migration ,"
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Christian Keuschnigg & Evelyn Ribi, 2008.
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CESifo Working Paper Series
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"Outsourcing, Unemployment and Welfare Policy ,"
CEPR Discussion Papers
6605, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Christian Keuschnigg & Evelyn Ribi, 2007.
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University of St. Gallen Department of Economics working paper series 2007
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"Firm Heterogeneity and the Labour Market Effects of Trade Liberalisation ,"
CESifo Working Paper Series
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