Arbeitspapier

Offshoring to a Developing Nation with a Dual Labor Market

We present a model of offshoring of tasks to a developing nation, which is characterized by a minimum wage formal sector and a flexible wage informal sector. Some offshored tasks are outsourced by the formal sector to the lower wage informal sector. An improvement in the productivity in performing offshored tasks in the developing country raises offshoring, but not necessarily formal-to-informal outsourcing, and, in response, the developed nation wage can fall. Productivity improvements in the informal sector expand both offshoring and outsourcing, and the developed nation wage must rise. When the minimum wage is reduced, the developed nation wage falls when most of the efficiency gains accrue to the informal sector.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 13420

Klassifikation
Wirtschaft
Thema
offshoring
outsourcing
informal sector
dual labor markets

Ereignis
Geistige Schöpfung
(wer)
Bandyopadhyay, Subhayu
Basu, Arnab K.
Chau, Nancy H.
Mitra, Devashish
Ereignis
Veröffentlichung
(wer)
Institute of Labor Economics (IZA)
(wo)
Bonn
(wann)
2020

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Bandyopadhyay, Subhayu
  • Basu, Arnab K.
  • Chau, Nancy H.
  • Mitra, Devashish
  • Institute of Labor Economics (IZA)

Entstanden

  • 2020

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