International Outsourcing and Wage Rigidity: A Formal Approach and First Empirical Evidence
AbstractInternational Outsourcing effects on labor markets are mostly analyzed within flexible wage settings. Using a modern duality approach, this paper formally investigates differences occurring in industries with low skilled wage rigidity and, for the first time in literature, presents empirical evidence supporting the theoretical findings. Using a logit model to analyze microeconomic German panel data, results show that International Outsourcing significantly increases low skilled unemployment when taking place in industries characterized by low skilled wage rigidity. Thus, in terms of unemployment, not International Outsourcing but inflexible labor market institutions instead should be blamed for harming low skilled labor.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 166.
Length: 26 p.
Date of creation: 2009
Date of revision:
International outsourcing; wage rigidity; unemployment;
Other versions of this item:
- Daniel Horgos, 2009. "International Outsourcing and Wage Rigidity: A Formal Approach and First Empirical Evidence," FIW Working Paper series 027, FIW.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Kai Daniel Schmid & Ulrike Stein, 2013.
"Explaining Rising Income Inequality in Germany, 1991-2010,"
32-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Kai Daniel Schmid & Ulrike Stein, 2013. "Explaining Rising Income Inequality in Germany, 1991-2010," SOEPpapers on Multidisciplinary Panel Data Research 592, DIW Berlin, The German Socio-Economic Panel (SOEP).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek).
If references are entirely missing, you can add them using this form.