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Moving People or Jobs? A New Perspective on Immigration and International Outsourcing

Author

Listed:
  • Hamid Beladi

    (University of Texas at San Antonio)

  • Avik Chakrabarti

    (University of Wisconsin-Milwaukee)

Abstract

We present a model that allows us to compare the effects that frictions involved in immigration and international outsourcing have on the skilled-unskilled wage inequality. We show that, for any given level of contractual friction in the production of intermediate goods, the wedge between the wages of the skilled and unskilled workers widens as the frictions in immigration wear out. The skilled-unskilled wage gap, for any given level of friction in immigration, is sensitive to variations in contractual frictions in intermediates that affect international outsourcing.

Suggested Citation

  • Hamid Beladi & Avik Chakrabarti, 2008. "Moving People or Jobs? A New Perspective on Immigration and International Outsourcing," Working Papers 0041, College of Business, University of Texas at San Antonio.
    • Handle: RePEc:tsa:wpaper:0086eco
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    File URL: http://interim.business.utsa.edu/wps/eco/0041ECO-414-2008.pdf
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    References listed on IDEAS

    as
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    2. Gene M. Grossman & Elhanan Helpman, 2003. "Outsourcing Versus FDI in Industry Equilibrium," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 317-327, 04/05.
    3. Harry Jerome, 1926. "Migration and Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number jero26-1.
    4. Hendricks, Lutz, 2001. "The Economic Performance of Immigrants: A Theory of Assortative Matching," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(2), pages 417-449, May.
    5. Gene M. Grossman & Elhanan Helpman, 2005. "Outsourcing in a Global Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 135-159.
    6. Jones, Ronald & Kierzkowski, Henryk & Lurong, Chen, 2005. "What does evidence tell us about fragmentation and outsourcing?," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 305-316.
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    8. Stark, Oded, 1994. "Market Environment, Trade Technology, and Migrants' Performance," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 45-52.
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    12. Ronald W. Jones & Sugata Marjit, 2018. "The Role of International Fragmentation in the Development Process," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 15, pages 255-261, World Scientific Publishing Co. Pte. Ltd..
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    14. repec:fth:michin:428 is not listed on IDEAS
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Wage Inequality; Immigration; Outsourcing; Contract Theory.;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F3 - International Economics - - International Finance
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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