Outsourcing Cost and Tax Progression under Nash Wage Bargaining with Flexible Outsourcing

Erkki Koskela

No 3142, CESifo Working Paper Series from CESifo

Abstract: It is analyzed the impacts of outsourcing cost and wage tax progression under labor market imperfections with Nash wage bargaining and flexible outsourcing. With sufficiently strong (weak) labor market imperfection, lower outsourcing cost has a wage-moderating (wage-increasing) effect so that there is a negative (positive) effect on equilibrium unemployment. Higher tax progression, to keep the relative tax burden per worker constant, has a wage moderating and a positive effect on employment and negative effect on outsourcing.

Keywords: Nash wage bargaining; outsourcing; labor tax reform (search for similar items in EconPapers)
JEL-codes: H22 J41 J51 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Outsourcing Cost and Tax Progression under Nash Wage Bargaining with Flexible Outsourcing (2010)
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