International outsourcing of skill intensive tasks and wage inequality
Date
2013
Authors
Anwar, S.
Sun, S.
Valadkhani, A.
Editors
Advisors
Journal Title
Journal ISSN
Volume Title
Type:
Journal article
Citation
Economic Modelling, 2013; 31(1):590-597
Statement of Responsibility
Conference Name
Abstract
Within the context of a product varietymodel, this paper examines the impact of international outsourcing of some skill intensive tasks onwage inequality. We consider four possibilities: long-run equilibriumwhere varieties of producer services are non-traded, long-run equilibrium where varieties of producer services are traded, short-run equilibrium where varieties of producer services are non-traded and short-run equilibriumwhere varieties of producer services are traded. It is shown that in each case, under certain conditions, international outsourcing can increase skilled–unskilled wage inequality. In the first three cases, outsourcing affects wage inequality directly as well as indirectly. In the short-run equilibrium, where varieties of producer services are traded, international outsourcing increases skilled–unskilled wage inequality only through an indirect channel. In the short-run equilibrium, where all goods are traded, the impact of outsourcing on wage inequality depends solely on the relative size of the income share of capital. Furthermore, in the long-run equilibrium, outsourcing increases the productivity of the industrial sector.
School/Discipline
Dissertation Note
Provenance
Description
Access Status
Rights
Copyright 2013 Elsevier B.V.