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The Effect of Offshoring on Labour Demand: Evidence from Sweden

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  • Ekholm, Karolina
  • Hakkala, Katariina

Abstract

We analyze the effects of offshoring of intermediate input production on labour demand in Sweden, distinguishing between workers with different educational attainments. The econometric results using data for the 1995-2000 period indicate that offshoring -- in particular to low-income countries -- tends to shift labour demand away from workers with an intermediate level of education. Offshoring to high-income countries, which is the largest component of overall offshoring, does not have any statistically significant effect on the composition of labour demand.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5648.

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Date of creation: Apr 2006
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Handle: RePEc:cpr:ceprdp:5648

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Keywords: factor-biased technological change; labour demand; offshoring; translog cost function;

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  1. Robert C. Feenstra & Gordon H. Hanson, 1996. "Globalization, Outsourcing, and Wage Inequality," NBER Working Papers 5424, National Bureau of Economic Research, Inc.
  2. Hansson, Pär, 1999. "Relative Demand for Skills in Swedish Manufacturing: Technology or Trade?," Working Paper Series 152, Trade Union Institute for Economic Research.
  3. Stephen Machin & John Van Reenen, 1998. "Technology And Changes In Skill Structure: Evidence From Seven Oecd Countries," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1215-1244, November.
  4. Mary Amiti & Shang-Jin Wei, 2005. "Fear of service outsourcing: is it justified?," Economic Policy, CEPR & CES & MSH, vol. 20(42), pages 308-347, 04.
  5. Alexander Hijzen & Holger Görg & Robert C. Hine, 2005. "International Outsourcing and the Skill Structure of Labour Demand in the United Kingdom," Economic Journal, Royal Economic Society, vol. 115(506), pages 860-878, October.
  6. Pär Hansson, 2005. "Skill Upgrading and Production Transfer within Swedish Multinationals," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(4), pages 673-692, December.
  7. Anderton, Bob & Brenton, Paul, 1999. "Outsourcing and Low-Skilled Workers in the UK," Bulletin of Economic Research, Wiley Blackwell, vol. 51(4), pages 267-85, October.
  8. Haskel, Jonathan & Heden, Ylva, 1999. "Computers and the Demand for Skilled Labour: Industry- and Establishment-Level Panel Evidence for the UK," Economic Journal, Royal Economic Society, vol. 109(454), pages C68-79, March.
  9. Falk, Martin & Koebel, Bertrand M, 2002. " Outsourcing, Imports and Labour Demand," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 567-86, December.
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