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Contribution Details

Type Journal Article
Scope Discipline-based scholarship
Title Outsourcing and skill-specific employment in a small economy: Austria after the fall of the Iron Curtain
Organization Unit
Authors
  • H Egger
  • P Egger
Item Subtype Original Work
Refereed Yes
Status Published in final form
Language
  • English
Journal Title Oxford Economic Papers
Publisher Oxford University Press
Geographical Reach international
ISSN 0030-7653
Volume 55
Number 4
Page Range 625 - 643
Date 2003
Abstract Text We set up a model, in which firms in a small industrialized country outsource part of their production to a foreign economy, which is rich in low-skilled labour. We analyse, how a decline in trade costs affects outsourcing activities and the production structure in the small economy. A stimulation of cross-border outsourcing raises wage dispersion and, if labour markets are unionized, also the employment of high-skilled relative to low-skilled labour. Using a panel of Austrian industries, we find, first, that decreasing trade barriers - as observed after the fall of the Iron Curtain - indeed stimulate outsourcing to Central and Eastern Europe and the former Soviet Union, and, second, that outsourcing to these countries significantly shifts relative employment in favour of high-skilled labour.
Digital Object Identifier 10.1093/oep/55.4.625
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Additional Information The accepted manuscript a pre-copy-editing, author-produced PDF of an article accepted for publication in Oxford Economic Papers following peer review. The definitive publisher-authenticated version (Oxford Economic Papers, 55(4):625-643) is available online at: http://oep.oxfordjournals.org/cgi/content/abstract/55/4/625.