Specialization, Outsourcing and Wages

Jakob Munch and Jan Skaksen

No 1907, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper studies the impact of outsourcing on individual wages. In contrast to the standard approach in the literature, we focus on domestic outsourcing as well as foreign outsourcing. By using a simple theoretical model, we argue that, if outsourcing is associated with specialization gains arising from an increase in the division of labor, domestic outsourcing tends to increase wages for both unskilled and skilled labor. We use a panel data set of workers in Danish manufacturing industries to show that domestic and foreign outsourcing affect wages as predicted by the theory.

Keywords: outsourcing; comparative advantage; specialization; wages (search for similar items in EconPapers)
JEL-codes: C23 F16 J31 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2005-12
New Economics Papers: this item is included in nep-bec, nep-cse, nep-int and nep-lab
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Citations: View citations in EconPapers (12)

Published - published in: Review of World Economics, 2009, 145 (1), 57-73

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Related works:
Journal Article: Specialization, outsourcing and wages (2009)
Working Paper: Specialization, Outsourcing and Wages (2006)
Working Paper: Specialization, Outsourcing and Wages (2005)
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