This
paper discusses global
outsourcing, which is the strategic use of outside
resources to perform activities that are traditionally handled by internal staff and resources. It is explained as a management strategy by which an organization delegates major, non-core functions to specialized and efficient
service providers. The paper explores the considerable debate over the impact of international trade and outsourcing on income inequality in the United States and Europe. The paper contends that, because of the notion of comparative advantage, outsourcing is expected to improve economic efficiency and raise aggregate welfare in all countries.