10.4225/03/5934dbe06af36 Cheng, Wenli Wenli Cheng Zhang, Dingsheng Dingsheng Zhang Would outsourcing increase or decrease wage Inequality? Two models, Two answers Monash University 2017 Wage Endogenous outsourcing monash:7036 Inequality 2005 1959.1/36474 2017-06-05 04:19:43 Journal contribution https://bridges.monash.edu/articles/journal_contribution/Would_outsourcing_increase_or_decrease_wage_Inequality_Two_models_Two_answers/5073202 This paper develops two models to study the impact of outsourcing on wage inequality between skilled and unskilled labor in the developed country and the developing country. The first model assumes symmetric production technologies in both countries, and predicts that outsourcing will increase wage inequality in the developed country, but decrease wage inequality in the developing country. The second model assumes asymmetric technologies in the production of the intermediate good and predicts that outsourcing can lead to an increase in wage inequality in both the developed country and the developing country.