Prof. Sener publishes in journal

M. Fuat Sener, assistant professor of economics, has co-authored a paper with Selin Sayek for a forthcoming issue of Review of Development Economics. The paper is titled "Outsourcing and Wage Inequality in a Dynamic Product Cycle Model." Using a North-South trade model, the authors show that increased outsourcing from the North to the South can raise the wage gap between skilled and less-skilled workers within each region. As more production is outsourced to the South, the pace of product development in the North accelerates. This stimulates real wage growth and makes all workers better off. The authors suggest that the negative income distribution effects of outsourcing must be weighed against its positive growth effects when designing trade and labor market policies.