TY  - RPRT
        AU  - Bandyopadhyay, Subhayu
AU  - Basu, Arnab K.
AU  - Chau, Nancy H.
AU  - Mitra, Devashish
        TI  - Offshoring to a Developing Nation with a Dual Labor Market
        PY  - 2020/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 13420
        UR  - https://www.iza.org/publications/dp13420
        AB  - We present a model of offshoring of tasks to a developing nation, which is characterized by a minimum wage formal sector and a flexible wage informal sector. Some offshored tasks are outsourced by the formal sector to the lower wage informal sector. An improvement in the productivity in performing offshored tasks in the developing country raises offshoring, but not necessarily formal-to-informal outsourcing, and, in response, the developed nation wage can fall. Productivity improvements in the informal sector expand both offshoring and outsourcing, and the developed nation wage must rise. When the minimum wage is reduced, the developed nation wage falls when most of the efficiency gains accrue to the informal sector.
        KW  - informal sector
KW  - outsourcing
KW  - offshoring
KW  - dual labor markets
        ER  -