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Labor Market Pooling, Outsourcing and Labor Contracts

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  • Picard, Pierre M.

    ()
    (University of Luxembourg)

  • Wildasin, David

    ()
    (University of Kentucky)

Abstract

Economic regions, such as urban agglomerations, face external demand and price shocks that produce income risk. Workers in large and diversified agglomerations may benefit from reduced wage volatility, while firms may outsource the production of intermediate goods and realize benefits from Chamberlinian externalities. Firms may also protect workers from wage risks through fixed wage contracts. This paper explores the relationships between firms' risks, workers' contracts, and the structure of production in cities.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4357.

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Length: 48 pages
Date of creation: Aug 2009
Date of revision:
Publication status: Published in Journal of Urban Economics, 2011, 70 (1), 47-60.
Handle: RePEc:iza:izadps:dp4357

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Keywords: Chamberlinian externalities; labor contracts; labor market;

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