Winners and Losers: Fragmentation, Trade and Wages Revisited
AbstractOur paper investigates the link between international outsourcing and wages utilising a large household panel and combining it with industry level information on industries' outsourcing activities from input-output tables. By doing so we can arguably overcome the potential aggregation bias as well as other shortcomings that affect industry level studies. We find that outsourcing has had a marked impact on wages. Distinguishing three skill categories we find evidence that outsourcing reduced the real wage for workers in the lowest skill categories by up to 1.8% while it increased real wages for high-skilled workers by up to 3.3%. This result is robust to a number of different specifications.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 385.
Length: 27 p.
Date of creation: 2003
Date of revision:
Outsourcing; Fragmentation; Skills; Wages;
Other versions of this item:
- Geishecker, Ingo & Görg, Holger, 2004. "Winners and Losers: Fragmentation, Trade and Wages Revisited," IZA Discussion Papers 982, Institute for the Study of Labor (IZA).
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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