We combine profit sharing and outsourcing, if the wage for worker is decided by a labor unionto analyze how does the implementation of profit sharing affect individual effort and thebargained wage and thus outsourcing? We find that profit sharing and the wage level havean individual...

What are the impacts of labor tax reform on wage setting and employment to keep therelative tax burden per low-skilled and high-skilled workers constant in the case ofheterogenous domestic labor markets, i.e. imperfect competition in low-skilled labor andperfect competition in high-skilled labor...

We analyze the following questions associated with flexible outsourcing under partlyimperfect dual domestic labour markets, where high skilled workers participate in firm’s profitvia profit sharing: How does the implementation of profit sharing influence flexibleoutsourcing? What is the...

We evaluate the effects of international outsourcing and labor taxation on wage formation and equilibrium unemployment in dual labor markets. Outsourcing promotes wage dispersion between the high-skilled and low-skilled workers. Higher domestic low-skilled wage tax, higher payroll tax and lower...

It is common knowledge that the standard New Keynesian model is not able to generate a persistent response in output to temporary monetary shocks. We show that this shortcoming can be remedied in a simple and intuitively appealing way through the introduction of labor turnover costs (such as...

We analyze the following questions associated with outsourcing and profit sharing under imperfect labour markets. How does strategic outsourcing influence wage formation, profit sharing and employee effort when firms commit to optimal profit sharing before wage formation or decide for profit...