The deterioration of the income and employment position of unskilled workers in the OECD since the 1980s is a well-documented fact. The debate about the causes of this development is dominated by two competing hypotheses, “North-South Trade” (“globalisation”) and technological progress....

This paper examines the effects of outsourcing on employment and unemployment and income distribution in an economy with Harris-Todaro type unemployment. This is because both wages and jobs are important concerns for an economy that engages in outsourcing and consequently experiences widespread...