The steady decline in the share of industry in total employment currently seems to be accelerated by competition from low wage countries, which depresses international prices for manufactured products and is being translated into offshore outsourcing and defensive innovation. In order to fully address these issues, we define offshore outsourcing in a broader sense, the one which is generally adopted in the public debate, namely trade in goods with countries where offshoring takes place. We replicate and extend the estimations realised by Rowthorn and Ramaswami (1998) and ask what has been the responsibility of outsourcing in the observed deindustrialisation in sixteen OECD countries. Our estimation strategy, relying on a dynamic panel methodology, leads to the conclusion that net trade with low wage countries is associated with a non-negligible average decrease of around 2 points in the manufacturing employment share between 1970 and 2002. However, this contribution, which substantially varies across countries, represents only a fifth of the deindustrialisation over the period. We did not find any increased impact of imports from developing countries in the second half of the period (1986-2002), other than that due to increased trade.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by CEPII research center in its series Working Papers with number
2006-07.
Find related papers by JEL classification: O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General F16 - International Economics - - Trade - - - Trade and Labor Market Interactions F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
This paper has been announced in the following NEP Reports:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)