10.4225/03/5934dbe06af36
Cheng, Wenli
Wenli
Cheng
Zhang, Dingsheng
Dingsheng
Zhang
Would outsourcing increase or decrease wage Inequality? Two models, Two answers
Monash University
2017
Wage
Endogenous outsourcing
monash:7036
Inequality
2005
1959.1/36474
2017-06-05 04:19:43
Journal contribution
https://bridges.monash.edu/articles/journal_contribution/Would_outsourcing_increase_or_decrease_wage_Inequality_Two_models_Two_answers/5073202
This paper develops two models to study the impact of outsourcing on wage inequality between skilled and unskilled labor in the developed country and the developing country. The first model assumes symmetric production technologies in both countries, and predicts that outsourcing will increase wage inequality in the developed country, but decrease wage inequality in the developing country. The second model assumes asymmetric technologies in the production of the intermediate good and predicts that outsourcing can lead to an increase in wage inequality in both the developed country and the developing country.