Foreign Investment, Outsourcing and Relative Wages

@inproceedings{Feenstra1995ForeignIO,
  title={Foreign Investment, Outsourcing and Relative Wages},
  author={R. Feenstra and G. Hanson},
  year={1995}
}
  • R. Feenstra, G. Hanson
  • Published 1995
  • Economics
  • In this paper we examine the reduction in the relative employment and wages of unskilled workers in the U.S. during the 1980's. We argue that a contributing factor to this decline was rising imports reflecting the outsourcing of production activities. In a theoretical model, we show that any increase in the Southern capital stock relative to that of the North, or neutral technological progress in the South, will increase the relative wage of skilled workers in both countries due to a shift in… CONTINUE READING
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