Specialization, Outsourcing and Wages

Jakob Munch and Jan Skaksen

No 19-2005, Working Papers from Copenhagen Business School, Department of Economics

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 extent of the market for intermediate goods, 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 outsurcing 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: 24 pages
Date: 2006-11-13
New Economics Papers: this item is included in nep-int and nep-lab
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Journal Article: Specialization, outsourcing and wages (2009)
Working Paper: Specialization, Outsourcing and Wages (2005)
Working Paper: Specialization, Outsourcing and Wages (2005)
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