Working Paper
Immigration and outsourcing: a general equilibrium analysis
Abstract: 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.
Keywords: Immigrants; Labor market; Contracting out;
Access Documents
File(s): File format is application/pdf http://research.stlouisfed.org/wp/2005/2005-058.pdf
Bibliographic Information
Provider: Federal Reserve Bank of St. Louis
Part of Series: Working Papers
Publication Date: 2007
Number: 2005-058