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A Theory of Outsourcing and Wage Decline

By Thomas J. Holmes and Julia Thornton Snider

òòò½Íø Journal: Microeconomics, May 2011

This paper develops a theory of outsourcing in which the circumstances under which factors of production can grab rents play the leading role. One factor has monopoly power (call this labor) while a second factor does not (call this capital). There are t...