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Outsourcing, Unemployment and Welfare Policy

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  • Keuschnigg, Christian
  • Ribi, Evelyn

Abstract

Outsourcing of labour intensive activities challenges the welfare state and undermines the protection of low-skilled workers. The stylized facts are that profits are concentrated among the high-skilled, involuntary unemployment is mostly among the low-skilled, and private unemployment insurance is missing. This paper analyzes the effectiveness of redistribution and social insurance and characterizes the optimal welfare policy when heterogeneous firms can outsource labour intensive components to low-wage economies.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6605.

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Date of creation: Dec 2007
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Handle: RePEc:cpr:ceprdp:6605

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Keywords: Outsourcing; redistribution; social insurance; unemployment;

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References

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Citations

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Cited by:
  1. Christian Keuschnigg, 2009. "Corporate Taxation and the Welfare State," CESifo Working Paper Series 2557, CESifo Group Munich.
  2. Michael P. Devereux & Christian Keuschnigg, 2009. "The Distorting Arm’s Length Principle," Working Papers 0910, Oxford University Centre for Business Taxation.
  3. Silvia Rocha-Akis & Ronnie Schöb, 2010. "Welfare Policy in the Presence of Unionised Labour and Internationally Mobile Firms," CESifo Working Paper Series 3032, CESifo Group Munich.
  4. Evelyn Ribi, 2009. "Optimal Size and Intensity of Job Search Assistance Programs," University of St. Gallen Department of Economics working paper series 2009 2009-19, Department of Economics, University of St. Gallen.
  5. Kohler, Wilhelm & Wrona, Jens, 2011. "Offshoring tasks, yet creating jobs?," University of Tuebingen Working Papers in Economics and Finance 12, University of Tuebingen, Faculty of Economics and Social Sciences.
  6. Torben M. Andersen & Allan Sørensen, 2010. "Globalization, tax distortions and public sector retrenchment," Economics Working Papers 2010-09, School of Economics and Management, University of Aarhus.
  7. Alexandre SIMONS, 2014. "Delocation, home wages and welfare," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2014007, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  8. Luis Carvalho & Aurora A.C. Teixeira, 2011. "Where are the poor in International Economics?," FEP Working Papers 425, Universidade do Porto, Faculdade de Economia do Porto.
  9. Christian Keuschnigg, 2009. "The Role of Corporate Taxation in a Large Welfare State," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 145(IV), pages 443-452, December.
  10. Silvia Rocha-Akis, 2012. "The Pain and Gain of Offshoring: The Effects of Tax Progression in a Segmented Labour Market," CESifo Working Paper Series 3739, CESifo Group Munich.
  11. Thomas Aronsson & Erkki Koskela, 2008. "Optimal Redistributive Taxation and Provision of Public Input Goods in an Economy with Outsourcing and Unemployment," CESifo Working Paper Series 2481, CESifo Group Munich.
  12. Victor-Adrian Troacă,Victor Troacă, 2012. "Outsourcing – Is It A Solution For The State?," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 187-189, March.
  13. Wilhelm Kohler & Jens Wrona, 2010. "Offshoring Tasks, yet Creating Jobs?," CESifo Working Paper Series 3019, CESifo Group Munich.

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