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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

    ()
    (ETH Zurich)

  • Pfaffermayr, Michael

    ()
    (University of Innsbruck)

  • Weber, Andrea

    ()
    (University of Mannheim)

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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Bibliographic 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:
Publication status: published as 'Sectoral adjustment of employment to shifts in outsourcing and trade: evidence from a dynamic fixed effects multinomial logit model' in: Journal of Applied Econometrics, 2007, 22 (3), 559-580
Handle: RePEc:iza:izadps:dp921

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

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References

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  1. Aiginger, Karl & Winter-Ebmer, Rudolf & Zweimüller, Josef, 1995. "East European Trade and the Austrian Labour Market," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1168, C.E.P.R. Discussion Papers.
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  21. Magnac, Thierry, 2000. "Subsidised Training and Youth Employment: Distinguishing Unobserved Heterogeneity from State Dependence in Labour Market Histories," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 110(466), pages 805-37, October.
  22. Kohler, Wilhelm, 2001. "A specific-factors view on outsourcing," The North American Journal of Economics and Finance, Elsevier, Elsevier, vol. 12(1), pages 31-53, March.
  23. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, Elsevier, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
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Citations

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Cited by:
  1. Pablo, Agnese, 2009. "Japan and her dealings with offshoring: An empirical analysis with aggregate data," MPRA Paper 16505, University Library of Munich, Germany.
  2. Henk L.M. Kox, 2004. "The contribution of business services to aggregate productivity growth," Industrial Organization, EconWPA 0402005, EconWPA.
  3. Cadarso, Maria Angeles & Gomez, Nuria & Lopez, Luis Antonio & Tobarra, Maria Angeles, 2008. "The EU enlargement and the impact of outsourcing on industrial employment in Spain, 1993-2003," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 19(1), pages 95-108, March.
  4. Böckerman, Petri & Riihimäki, Elisa, 2009. "International outsourcing and labour demand: Evidence from Finnish firm-level data," MPRA Paper 16903, University Library of Munich, Germany.
  5. Geishecker, Ingo, 2006. "The impact of international outsourcing on individual employment security: a micro level analysis," Discussion Papers, Free University Berlin, School of Business & Economics 2006/17, Free University Berlin, School of Business & Economics.
  6. Rosario Crinò, 2007. "Offshoring, Multinationals and Labor Market: A Review of the Empirical Literature," KITeS Working Papers, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy 196, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jan 2007.
  7. Gorg, Holger & Hanley, Aoife, 2005. "Labour demand effects of international outsourcing: Evidence from plant-level data," International Review of Economics & Finance, Elsevier, Elsevier, vol. 14(3), pages 365-376.
  8. Egger, Hartmut & Egger, Peter, 2005. "Labor market effects of outsourcing under industrial interdependence," International Review of Economics & Finance, Elsevier, Elsevier, vol. 14(3), pages 349-363.
  9. Yiping Zhu, 2008. "Globalisation, Employment, and Wage Rate: What Does Literature Tell Us?," IMK Working Paper, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute 07-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

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