Production Offshoring and the Skill Composition of Italian Manufacturing Firms: A Counterfactual Analysis
AbstractThis work explores the effects of cross-border relocation of production on the skill composition of Italian manufacturing firms. Its aim is to assess if the firms’ strategy to offshore production activities towards cheap labor countries determines a bias in the relative employment of skilled versus unskilled workers. Using a balanced panel of firm-based data across the period 1995-2003, we test this skill-bias hypothesis by means of a counterfactual experiment in which we employ a difference-in-differences propensity score matching estimator in order to control for selectivity bias without relying on a specific functional form of the relations of interest. In line with the literature, our results point to confirm a general, although weak, skill bias effect of production offshoring on the labor-force composition of Italian manufacturing: in particular, we find that firms farming out production stages in 1998-2000 show an upward shift in the skill ratio with respect to the counterfactual of firms not moving their production abroad. However, when we look at the single components of the skill ratio, we find that the skill bias effect is primarily driven by a fall in the employment of production workers, while a weak or not significant effect is found with respect to the employment of skilled personnel.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2007.97.
Date of creation: Nov 2007
Date of revision:
Production Offshoring; Skill Bias; Difference-in-Differences; Propensity;
Other versions of this item:
- Roberto Antonietti & Davide Antonioli, 2009. "Production offshoring and the skill composition of Italian manufacturing firms: a counterfactual analysis," Openloc Working Papers 0903, Public policies and local development.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-03-08 (All new papers)
- NEP-BEC-2008-03-08 (Business Economics)
- NEP-HRM-2008-03-08 (Human Capital & Human Resource Management)
- NEP-LAB-2008-03-08 (Labour Economics)
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.:
- Holger Görg & Aoife Hanley, 2004.
"Does Outsourcing Increase Profitability?,"
The Economic and Social Review,
Economic and Social Studies, vol. 35(3), pages 267-288.
- Blomström, Magnus & Fors, Gunnar & Lipsey, Robert E., 1997.
"Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden,"
Working Paper Series in Economics and Finance
200, Stockholm School of Economics.
- Blomstrom, Magnus & Fors, Gunnar & Lipsey, Robert E, 1997. "Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden," Economic Journal, Royal Economic Society, vol. 107(445), pages 1787-97, November.
- Blomström, Magnus & Fors, Gunnar & Lipsey, Robert E., 1997. "Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden," Working Paper Series 490, Research Institute of Industrial Economics.
- Magnus Blomstrom & Gunnar Fors & Robert E. Lipsey, 1997. "Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden," NBER Working Papers 6205, National Bureau of Economic Research, Inc.
- G. Barba Navaretti & E. Santarelli & M. Vivarelli, 2000.
"The Role of Subsidies in Promoting Italian Joint Ventures in Least Developed and Transition Economics,"
386, Dipartimento Scienze Economiche, Universita' di Bologna.
- Giorgio Barba Navaretti & Enrico Santarelli & Marco Vivarelli, 2002. "The role of subsidies in promoting Italian joint ventures in least developed and transition economies," Applied Economics, Taylor & Francis Journals, vol. 34(12), pages 1563-1569.
- Giorgio BARBA NAVARETTI & Enrico SANTARELLI & Marco VIVARELLI, 2000. "The Role of Subsidies in Promoting Italian Joint Ventures in Least Developed and Transition Economies," Working Papers 144, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Colin Davis & Alireza Naghavi, 2011.
"Offshoring Production: A Simple Model Of Wages, Productivity, And Growth,"
Western Economic Association International, vol. 49(2), pages 334-348, 04.
- Colin Davies & Alireza Naghavi, 2008. "Offshoring Production: A Simple Model of Wages, Productivity, and Growth," Center for Economic Research (RECent) 027, University of Modena and Reggio E., Dept. of Economics.
- Rosario Crinò, 2009.
"Employment Effects of Service Offshoring: Evidence from Matched Firms,"
UFAE and IAE Working Papers
800.09, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Crinò, Rosario, 2010. "Employment effects of service offshoring: Evidence from matched firms," Economics Letters, Elsevier, vol. 107(2), pages 253-256, May.
- Rosario Crinò, 2009. "Employment Effects of Service Offshoring: Evidence from Matched Firms," Development Working Papers 286, Centro Studi Luca d\'Agliano, University of Milano.
- Rosario Crinò, 2009. "Employment Effects of Service Offshoring: Evidence from Matched Firms," Working Papers 417, Barcelona Graduate School of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (barbara racah).
If references are entirely missing, you can add them using this form.