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Title:Specialization, outsourcing and wages PDF Logo
Authors:Munch, Jakob Roland
Rose Skaksen, Jan
Issue Date:2005
Series/Report no.:IZA Discussion Papers 1907
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.
Subjects:outsourcing
comparative advantage
specialization
wages
JEL:F16
J31
C23
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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