ABSTRACT
The growing importance of outsourcing activities has given rise to an important economic literature on its impact on jobs, wages, efficiency and economic competitiveness. The purpose of this chapter is to present the economic rationale for outsourcing activities and to document the empirical evidence on the impact of outsourcing on wages and employment. Its focus will be both on the outsourcing decision at the firm level (domestic outsourcing) and on international outsourcing.
