TY  - RPRT
        AU  - Bandyopadhyay, Subhayu
AU  - Basu, Arnab K.
AU  - Chau, Nancy H.
AU  - Mitra, Devashish
        TI  - Disentangling the Wage Impacts of Offshoring on a Developing Country: Theory and Policy
        PY  - 2016/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 9973
        UR  - https://www.iza.org/index.php/publications/dp9973
        AB  - The various channels through which a reduction in the cost of offshoring can improve wages in a developed country are by now well understood. But does a similar reduction in the offshoring cost also benefit workers in the world's factories in developing countries? Using a parsimonious two-country model of offshoring we find very nuanced results. These include cases where wages monotonically improve or worsen as well as those where wages exhibit an inverted U-shaped relationship in response to parametric reductions in the cost of offshoring. We identify qualitative conditions under which wages and welfare increase or decrease in the developing world as a result of a reduction in offshoring costs. Since global welfare always rises with an improvement in offshoring technology, we find that there is a role for a wage tax or a minimum wage in the developing country. We derive the optimal levels of such policies.
        KW  - wages
KW  - international offshoring
KW  - wage tax
KW  - minimum wage
        ER  -