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 …

We study ex post outsourcing of production in an imperfectly discriminating contest, interpreted here as a research … tournament or a procurement contest for being awarded some production contract. We find that the possibility of outsourcing …, outsourcing reduces the procurement costs of inducing a given level of effort if the contest organizer can collect entry fees …

Feenstra and Hanson (1997) have argued in the context of the North American Free Trade Agreement that US outsourcing to … skill part. As a result, skilled workers in Austria are losing from outsourcing, while gaining in Poland. In Austria …. In both countries outsourcing contributes roughly 35 percent to these changes in the relative wages for skilled worker …

This paper addresses outsourcing in the two-type optimal income tax model. If the government is able to control … outsourcing via a direct tax instrument, outsourcing will not affect the marginal income tax structure. In the absence of a direct … tax instrument, and under the plausible assumption that higher outsourcing increases the wage differential, the government …

We analyze a model that focuses on the export/outsource decision. Outsourcing has the advantage of providing better … technology embodied in the local capital. The decision of whether to offer an outsourcing contract weighs these two effects … against each other. The host country accepts the outsourcing contract if the higher price they pay for the outsourced good is …

We show that, even with flexible domestic wages, international outsourcing may worsen the welfare of the home country … and reduce the profits of all firms. If wages are rigid, outsourcing is welfare-improving if and only if the sum of the … subsidy may improve welfare. We also extend the model to a two-period framework. Delaying outsourcing can be gainful because …

We combine profit sharing and outsourcing, if the wage for worker is decided by a labor union to analyze how does the … implementation of profit sharing affect individual effort and the bargained wage and thus outsourcing? We find that profit sharing … a wage increasing effect via labor demand elasticity so that outsourcing and employment effects are also ambiguous …