Resource title

International fragmentation : boon or bane for domestic employment?

Resource image

image for OpenScout resource :: International fragmentation : boon or bane for domestic employment?

Resource description

In this paper, we introduce the fairness approach to efficiency wages into a standard model of international fragmentation. This gives us a theoretical framework in which wage inequality and unemployment rates are co-determined and therefore the public concern can be addressed that international fragmentation and outsourcing to low wage countries lead to domestic joblosses. We develop a novel diagrammatic tool to illustrate the main labour market effects of international fragmentation. We also explore how preferences for fair wages and the size of unemployment benefits govern the employment effects of outsourcing and critically assess the role of political intervention that aims to reduce unemployment benefits under internationally fragmented production.

Resource author

Hartmut Egger, Udo Kreickemeier

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/19059

Resource license

Adapt according to the presented license agreement and reference the original author.