Immigration vs. outsourcing: Effects on labor markets

Anti-globalizers are concerned, inter alia, with the effects on a developed country's real wage rate of legal or illegal immigration, as well as the outsourcing of labor-intensive activities abroad. Although a lowering of the wage rate may ensue, it is by no means a logical necessity. I show that either immigration or outsourcing of a labor-intensive fragment of production may serve to raise the wage rate of national labor in a developed country. As well, I point out how these two effects differ from each other.