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Specialization, outsourcing and wages

[journal article]

Munch, Jakob Roland; Skaksen, Jan Rose

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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. 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.
Keywords outsourcing
Classification Business Administration; Labor Market Research
Free Keywords Comparative advantage; Specialization; Wages; F16; J31; C23
Document language English
Publication Year 2009
Page/Pages p. 57-73
Journal Review of World Economics, 145 (2009) 1
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)