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Outsourcing, Unemployment and Welfare Policy

Kurzfassung The paper investigates the consequences of outsourcing of labor intensive activities to low-wage economies. This trend challenges the two basic functions of the welfare state, redistribution and social insurance when private unemployment insurance markets are missing. The main results are: (i) outsourcing raises unemployment and labor income risk of unskilled workers; (ii) it increases inequality between high- and low-income groups; and (iii) the gains from outsourcing can be made Pareto improving by using a redistributive linear income tax if redistribution is initially not too large. We finally derive the welfare optimal redistribution and unemployment insurance policies.
   
Typ Artikel (wissenschaftliche Zeitschrift)
   
Schlagwörter (Tags) Outsourcing, unemployment, social insurance, redistribution
   
Sprache Englisch
Art des Artikels Journal Artikel
Erscheinungsdatum 5-2-2009
Zeitschrift Journal of International Economics
Verlag Elsevier (Amsterdam)
ISSN 0022-1996
Jahrgang bzw. Volume 78
Nummer bzw. Issue 1
Seite(n) 168-176
Review kein Review
   
Zitation Keuschnigg, Christian ; Ribi, Evelyn: Outsourcing, Unemployment and Welfare Policy. In: Journal of International Economics 78 (2009), Nr. 1, S. 168-176.