Equilibrium Unemployment with Outsourcing under Labour Market Imperfections
We study the various consequences of and the incentives for outsourcing. We argue that the wage elasticity of labour demand increases as a function of the share of outsourcing, which is a result consistent with existing empirical research. Furthermore, we show that a production mode with a higher proportion of outsourcing activity reduces the negotiated wage in the high-wage country with an imperfectly competitive labour market so that outsourcing reduces equilibrium unemployment. Finally, we characterize the optimal production mode and show that stronger labour market imperfections lead to a production mode with a higher share of outsourcing.
|Date of creation:||2007|
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- Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2006.
"Can deunionization lead to international outsourcing?
[Führt der Rückzug der Gewerkschaften zur internationalen Auslagerung von Arbeitsplätzen?]," Discussion Papers, Research Unit: Market Processes and Governance SP II 2006-23, Social Science Research Center Berlin (WZB).
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- Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2005. "Can deunionization lead to international outsourcing?," Working Papers in Economics 15/05, University of Bergen, Department of Economics.
- Kjell Erik Lommerud & Frode Meland & Odd Rune Straume, 2005. "Can Deunionization Lead to International Outsourcing?," CESifo Working Paper Series 1545, CESifo Group Munich.
- Pierre Cahuc & Stéphane Carcillo & André Zylberberg, 2014.
Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers)
- Mine Zeynep Senses, 2006. "The Effects of Outsourcing on the Elasticity of Labor Demand," Working Papers 06-07, Center for Economic Studies, U.S. Census Bureau.
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"Labour Market Institutions and Economic Performance,"
CEP Discussion Papers
dp0407, Centre for Economic Performance, LSE.
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"Wage Bargaining Structure, Employment and Economic Integration,"
Royal Economic Society, vol. 104(424), pages 528-41, May.
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- Jan Rose Skaksen, 2004. "International outsourcing when labour markets are unionized," Canadian Journal of Economics, Canadian Economics Association, vol. 37(1), pages 78-94, February.
- Glass, Amy Jocelyn & Saggi, Kamal, 2001. "Innovation and wage effects of international outsourcing," European Economic Review, Elsevier, vol. 45(1), pages 67-86, January.
- Skaksen, Mette Yde & Sorensen, Jan Rose, 2001. "Should trade unions appreciate foreign direct investment," Journal of International Economics, Elsevier, vol. 55(2), pages 379-390, December.
- Lars Calmfors & Giancarlo Corsetti & Seppo Honkapohja & John Kay & Willi Leibfritz & Gilles Saint-Paul & Hans-Werner Sinn & Xavier Vives, 2004. "Pay-setting Systems in Europe: On-going Development and Possible Reforms," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 61-83, October.
- Amiti, Mary & Wei, Shang-Jin, 2004. "Fear of Outsourcing: Is It Justified?," CEPR Discussion Papers 4719, C.E.P.R. Discussion Papers.
- Hans-Werner Sinn, 2011. "Introduction," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 12(3), pages 09-17, December.
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