This paper reviews existing literature on the outsourcing and wage inequalityand empirically analyzes the effect of global outsourcing on the wage inequalityin manufacturing in Korea from 1999-2006. We employed the System GMMwith data obtained from the Mining and Manufacturing Surveys, Input-OutputTables and SKTC Trade Statistics. Our findings are as follows. First, log wagedifferential between skilled and low-skilled workers decreased by 3.3%.Second, narrow and wide measures of global outsourcing increased by 7.1%and 12.6% respectively. Third, narrow outsourcing had a significant impact onthe wage inequality. Fourth, the effect of wide outsourcing was insignificant.