Reference : Labor Market Pooling, Outsourcing and Labor Contracts
Scientific journals : Article
Business & economic sciences : Economic systems & public economics
Labor Market Pooling, Outsourcing and Labor Contracts
Picard, Pierre M. mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Wildasin, David mailto [University of Kentucky]
Journal of Urban Economics
Academic Press
Yes (verified by ORBilu)
San Diego
[en] Input sharing ; Fragmentation ; Outsourcing ; Labor market pooling ; Labor contracts
[en] This paper considers the interaction between input sharing and labor market pooling in urban areas. In particular, it examines the impact of the size of a city and business risks on the organizational structures of firms located in urban agglomerations, and it also discusses the impact of organizational structure on incentives to insure workers against income risks. It is shown that manufacturing firms suffer from a coordination game in their decision to outsource production. The existence of idiosyncratic risks causes manufacturers to refrain from outsourcing. The incentives to offer wage and employment protection to workers are more pronounced when manufacturers outsource the production of their inputs to a local market, which mitigates the impact of labor market pooling.
Researchers ; Professionals ; Students ; General public,%20Outsourcing%20and%20Labor%20Contracts.pdf

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