Two-Way Outsourcing, International Migration, and Wage Inequality
AbstractThis paper develops a general equilibrium model with a vertical production structure to examine the relationship between offshore outsourcing and international migration,especially emphasizing their effects on the wages of skilled and unskilled workers. Two-way outsourcing (simultaneous insourcing and outsourcing) in skilled-labor intensive services arises due to product differentiation and scale economies, and outsourcing in unskilled-labor intensive processing occurs because of factor endowment differences. The tractability of the model allows us to rank outsourcing and migration, according to the wages of both types of workers. Finally, we also analyze under what conditions outsourcing and international migration are complements or substitutes.
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Bibliographic InfoPaper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number 241.
Length: 38 pages
Date of creation: Apr 2009
Date of revision:
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Other versions of this item:
- Morihiro Yomogida & Laixun Zhao, 2010. "Two-Way Outsourcing, International Migration, and Wage Inequality," Southern Economic Journal, Southern Economic Association, vol. 77(1), pages 161-180, July.
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-06-03 (All new papers)
- NEP-BEC-2009-06-03 (Business Economics)
- NEP-DEV-2009-06-03 (Development)
- NEP-LAB-2009-06-03 (Labour Economics)
- NEP-MIG-2009-06-03 (Economics of Human Migration)
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- Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007.
"Distributional Effects of Globalization in Developing Countries,"
NBER Working Papers
12885, National Bureau of Economic Research, Inc.
- Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
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