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The Impact Of International Outsourcing On Labour Market Dynamics In Germany

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  • Ronald Bachmann
  • Sebastian Braun

Abstract

Using an administrative data set containing daily information on individual workers' employment histories, we investigate how workers' labour market transitions are affected by international outsourcing. In order to do so, we estimate hazard rate models for match separations, as well as for worker flows from employment to another job, to unemployment, and to nonparticipation. Outsourcing has a positive but small impact on overall job stability in the manufacturing sector, and considerably increases job stability in the service sector. However, the effect of outsourcing varies strongly across skill levels and age groups, with negative effects for some workers. This is especially the case in the manufacturing sector, where the hazard of transiting to nonemployment rises with international outsourcing for medium-skilled and older workers.

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File URL: http://hdl.handle.net/10.1111/j.1467-9485.2010.00535.x
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Bibliographic Info

Article provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.

Volume (Year): 58 (2011)
Issue (Month): 1 (February)
Pages: 1-28

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Handle: RePEc:bla:scotjp:v:58:y:2011:i:1:p:1-28

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Cited by:
  1. Lo Turco, Alessia & Maggioni, Daniela & Picchio, Matteo, 2012. "Offshoring and Job Stability: Evidence from Italian Manufacturing," IZA Discussion Papers 6514, Institute for the Study of Labor (IZA).
  2. Holger Görg & Dennis Görlich, 2012. "Offshoring, Wages and Job Security of Temporary Workers," Kiel Working Papers 1797, Kiel Institute for the World Economy.
  3. Martin Borowiecki & Bernhard Dachs & Doris Hanzl-Weiss & Steffen Kinkel & Johannes Pöschl & Magdolna Sass & Thomas Christian Schmall & Robert Stehrer & Andrea Szalavetz, 2012. "Global Value Chains and the EU Industry," wiiw Research Reports 383, The Vienna Institute for International Economic Studies, wiiw.
  4. Ronald Bachmann & Daniel Baumgarten & Joel Stiebale, 2011. "Cross-border Investment, Heterogeneous Workers, and Employment Security – Evidence from Germany," Ruhr Economic Papers 0268, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  5. Daniel Baumgarten, 2009. "International Outsourcing, the Nature of Tasks, and Occupational Stability – Empirical Evidence for Germany," Ruhr Economic Papers 0108, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  6. Craig P. Aubuchon & Subhayu Bandyopadhyay & Sumon Kumar Bhaumik, 2012. "The extent and impact of outsourcing: evidence from Germany," Review, Federal Reserve Bank of St. Louis, issue July, pages 287-304.
  7. Wagner, Joachim, 2009. "Offshoring and Firm Performance: Self-Selection, Effects on Performance, or Both?," IZA Discussion Papers 4605, Institute for the Study of Labor (IZA).
  8. Abigail Cooke & Thomas Kemeny & David Rigby, 2013. "Cheap Imports and the Loss of U.S. Manufacturing Jobs," SERC Discussion Papers 0148, Spatial Economics Research Centre, LSE.

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