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Is labor flexibility a substitute to offshoring? Evidence from Italian manafacturing

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  • Andrea F. Presbitero
  • Matteo G. Richiardi
  • Alessia Amighini

Abstract

We test whether labor flexibility acts as a substitute to delocalization. Using Italian survey data, we show that a higher share of temporary workers appears to reduce the likelihood of future offshoring. However, once reverse causality and spurious correlation are controlled for with IV techniques, the relationship vanishes. This finding suggests that the threat of delocalization to win support for further labor market reforms is probably misplaced.

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Bibliographic Info

Paper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 122.

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Date of creation: 2012
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Handle: RePEc:cca:wplabo:122

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Keywords: offshoring; labor flexibility; temporary work; delocalization; labor market reforms; cost saving;

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