Policy evaluation in the presence of outsourcing: global competitiveness versus political feasibility
Subhayu Bandyopadhyay () and
Howard Wall ()
No 2005-074, Working Papers from Federal Reserve Bank of St. Louis
We analyze the effects of outsourcing in the presence of a minimum wage by presenting a general-equilibrium model with an oligopolistic export sector and a competitive import-competing sector. An outsourcing tax is politically popular because it switches jobs to unemployed natives. It is also economically sound because it raises national income. An export subsidy may or may not be justified on welfare grounds. Increased international competition has no effect on the level of outsourcing, but the direction of its effect on unemployment and national income depends on the relative factor intensities of the two sectors. ; Original title: Oligopoly and outsourcing
Keywords: Contracting out; Labor market (search for similar items in EconPapers)
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Published in Economics and Politics, July 2007, 19(2), pp. 219-34
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Journal Article: POLICY EVALUATION IN THE PRESENCE OF OUTSOURCING: GLOBAL COMPETITIVENESS VERSUS POLITICAL FEASIBILITY (2007)
Working Paper: Policy Evaluation in the Presence of Outsourcing: Global Competitiveness versus Political Feasibility (2006)
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