Mitra, Devashish; Ranjan, Priya - 2009
In a two-sector, general-equilibrium model with labor-market search frictions, we find that wage increases and sectoral … unemployment decreases upon offshoring in the presence of perfect intersectoral labor mobility. If, as a result, labor moves to the … sector with the lower (or equal) vacancy costs, there is an unambiguous decrease in economywide unemployment. With imperfect …