Nowadays, outsourcing has created new employment possibilities especially in developing countries. Although Albania is considered as one of the most prominent outsourcing destinations in the Balkans, there is little evidence in terms of the varying levels of wage and productivity of workers within the outsourcing sectors. The aim of this thesis is to provide insights regarding the wage and productivity differentials in two specific service-providing industries in Albania, namely IT BPO and BPO. The analysis of primary data collected through a survey (N=62) in four Albanian companies and eight interviews with representatives of outsourcing companies in both mentioned sectors, shows that employees in these industries have below the average wages. Furthermore, the findings from the thesis suggest that education level, employment duration within the company, experience and trainings are significant factors towards wage differentials. However, in terms of productivity differentials, findings show that when working eight hours per day, applying trainings, and including breaks during additional working hours, productivity is not negatively affected. Lastly, all four models of the Efficiency Wage Theory are applicable in both these sectors; however, regarding the relationship of Efficiency Wage Theory with firm size, results are inconclusive. Considering the existing literature gap, this thesis provides insightful evidence and serves as a starting point for future empirical studies.

Publication Date


Document Type

Senior Project

Student Type



Venera Demukaj

Advisor/Committee Member

Edona Maloku

Advisor/Committee Member

Mrika Kotorri


RIT Kosovo