Rising Foreign Productivity Drives Surge in U.S. Outsourcing Activity
The article examines why U.S. manufacturing industries have been outsourcing work overseas between 1972 and 2002. The researchers looked at factors like wages, union contracts, transportation costs, and technology investment. They found that wages and union coverage don't fully explain the increase in outsourcing. Instead, the main reasons for more outsourcing are likely foreign productivity growth and technological advancements allowing for more international specialization in making products.