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Labor Market Pooling, Outsourcing and Labor Contracts

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  • Pierre M. Picard
  • David E. Wildasin

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.

Suggested Citation

  • Pierre M. Picard & David E. Wildasin, 2009. "Labor Market Pooling, Outsourcing and Labor Contracts," CESifo Working Paper Series 2765, CESifo.
    • Handle: RePEc:ces:ceswps:_2765
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    References listed on IDEAS

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    More about this item

    Keywords

    labor market; labor contracts; Chamberlinian externalities;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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