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Sectoral Adjustment of Employment: The Impact of Outsourcing and Trade at the Micro Level

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Author Info
Egger, Peter (University of Innsbruck)
Pfaffermayr, Michael (University of Innsbruck)
Weber, Andrea (Institute for Advanced Studies, Vienna and IZA Bonn)

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Abstract

This paper analyzes the effects of trade and outsourcing on the transition probabilities of employment between sectors, using a dynamic multinomial logit framework with fixed effects. The data contain individual Austrian male workers over the period 1988-2001. Our results strongly support the view that international economic forces are important determinants of labor market turnover. Increases in imports, terms of trade and, especially, in the outsourcing share negatively affect the probability of staying in or changing into the manufacturing sector, even more so for industries with a comparative disadvantage.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 921.

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Length: 31 pages
Date of creation: Nov 2003
Date of revision:
Handle: RePEc:iza:izadps:dp921

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Related research
Keywords: labor market turnover outsourcing dynamic discrete choice fixed effects panel estimation

Other versions of this item:

Find related papers by JEL classification:
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models

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References listed on IDEAS
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.:
  1. Jose Manuel Campa & Linda S. Goldberg, 2001. "Employment Versus Wage Adjustment And The U.S. Dollar," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 477-489, August. [Downloadable!] (restricted)
    Other versions:
  2. Sven W. Arndt, 1997. "Globalization and the Open Economy," Working Papers 9701, Lowe Institute of Political Economy. [Downloadable!]
    Other versions:
  3. Kohler, Wilhelm, 2001. "A specific-factors view on outsourcing," The North American Journal of Economics and Finance, Elsevier, vol. 12(1), pages 31-53, March. [Downloadable!] (restricted)
  4. Bo E. Honoré & Ekaterini Kyriazidou, 2000. "Panel Data Discrete Choice Models with Lagged Dependent Variables," Econometrica, Econometric Society, vol. 68(4), pages 839-874, July.
  5. Gene M. Grossman, 1986. "Imports as a Cause of Injury: The Case of the U.S. Steel Industry," NBER Working Papers 1494, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Linda Goldberg & Joseph Tracy, 2001. "Exchange Rates and Wages," NBER Working Papers 8137, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Vivarelli, Marco & Evangelista, Rinaldo & Pianta, Mario, 1996. "Innovation and employment in Italian manufacturing industry," Research Policy, Elsevier, vol. 25(7), pages 1013-1026, October. [Downloadable!] (restricted)
  8. Linda Goldberg & Joseph Tracy & Stephanie Aaronson, 1999. "Exchange Rates and Employment Instability: Evidence from Matched CPS Data," American Economic Review, American Economic Association, vol. 89(2), pages 204-210, May. [Downloadable!] (restricted)
  9. Helmut Hofer & Peter Huber, 2003. "Wage and Mobility Effects of Trade and Migration on the Austrian Labour Market," Empirica, Springer, vol. 30(2), pages 107-125, June. [Downloadable!] (restricted)
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  10. Pierre-Olivier Gourinchas, 1998. "Exchange Rates and Jobs: What Do We Learn from Job Flows?," NBER Working Papers 6864, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Magnac, Thierry, 2000. "Subsidised Training and Youth Employment: Distinguishing Unobserved Heterogeneity from State Dependence in Labour Market Histories," Economic Journal, Royal Economic Society, vol. 110(466), pages 805-37, October. [Downloadable!] (restricted)
  12. Aiginger, Karl & Winter-Ebmer, Rudolf & Zweimüller, Josef, 1995. "East European Trade and the Austrian Labour Market," CEPR Discussion Papers 1168, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  13. Burgess, Simon M & Knetter, Michael M, 1998. "An International Comparison of Employment Adjustment to Exchange Rate Fluctuations," Review of International Economics, Blackwell Publishing, vol. 6(1), pages 151-63, February.
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  14. Michael W. Klein & Scott Schuh & Robert K. Triest, 2002. "Job creation, job destruction, and international competition: a literature review," Working Papers 02-7, Federal Reserve Bank of Boston. [Downloadable!]
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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.)

  1. Jakob Roland Munch, 2005. "International Outsourcing and Individual Job Separations," Discussion Papers 05-11, University of Copenhagen. Department of Economics (formerly Institute of Economics). [Downloadable!]
  2. Henk L.M. Kox, 2004. "The contribution of business services to aggregate productivity growth," Industrial Organization 0402005, EconWPA. [Downloadable!]
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