Outsourcing, unemployment and welfare policy

Unemployment and Economic Welfare

David Andolfatto is a professor of economics at the the University of Waterloo and the University of Western Ontario. Paul Gomme is an economic advisor at the Federal Reserve Bank of Cleveland. Both authors are members of the Centre for Research on Economic Fluctuations and Employment in Montreal, Canada. They thank LutzAlexander Busch, Gordon Myers, and Ed Nosal for helpful comments and critic...

Strategic Outsourcing , Profit Sharing and Equilibrium Unemployment

We analyze the following questions under imperfect labour markets. How does strategic outsourcing influence wage formation, profit sharing and employee effort when firms commit to optimal profit sharing before wage formation or decide for profit sharing after wage formation? What is the relationship between outsourcing, profit sharing, and equilibrium unemployment? We find that in both scenario...

Fiscal Policy and Unemployment

This paper explores the interaction between fiscal policy and unemployment. It develops a novel dynamic model in which unemployment can arise but can be mitigated by tax cuts and public spending increases. Such policies are fiscally costly, but can be financed by issuing government debt. In the context of this model, the paper analyzes the simultaneous determination of fiscal policy and unemplo...

Welfare State Unemployment: A Comment

Unemployment and Welfare Reform in Rural California

Recent welfare reforms, designed to move adult welfare recipients into employment, promise to add 10 to 15 percent to labor forces in rural and agricultural areas of California with average annual unemployment rates of 12 to 20 percent. This paper develops and estimates a simultaneous-equation model to test the hypothesis that high unemployment and seasonality endemic to rural and agricultural ...