Winners and losers: A Micro-level Analysis of International Outsourcing and Wages
AbstractOur paper investigates the link between international outsourcing and wages utilizing a large household panel and combining it with industry level information on industries' outsourcing activities from input-output tables. This approach avoids problems such as aggregation bias, potential endogeneity bias and poor skill definitions that commonly hamper industry-level studies. We find that outsourcing has had a marked impact on wages. Applying two alternative skill classifications we find evidence that a one percentage point increase in outsourcing reduced the wage for workers in the lowest skill categories by up to 1.5% while it increased wages for high-skilled workers by up to 2.6%. This result is robust to a number of different specifications.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6484.
Date of creation: Sep 2007
Date of revision:
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Other versions of this item:
- Ingo Geishecker & Holger Görg, 2008. "Winners and losers: a micro-level analysis of international outsourcing and wages," Canadian Journal of Economics, Canadian Economics Association, vol. 41(1), pages 243-270, February.
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-30 (All new papers)
- NEP-BEC-2007-09-30 (Business Economics)
- NEP-HRM-2007-09-30 (Human Capital & Human Resource Management)
- NEP-LAB-2007-09-30 (Labour Economics)
- NEP-POL-2007-09-30 (Positive Political Economics)
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