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

Author

Listed:
  • Egger, Peter

    (ETH Zurich)

  • Pfaffermayr, Michael

    (University of Innsbruck)

  • Weber, Andrea

    (Central European University)

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.

Suggested Citation

  • Egger, Peter & Pfaffermayr, Michael & Weber, Andrea, 2003. "Sectoral Adjustment of Employment: The Impact of Outsourcing and Trade at the Micro Level," IZA Discussion Papers 921, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp921
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    References listed on IDEAS

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    Cited by:

    1. Kevin Dano, 2023. "Transition Probabilities and Moment Restrictions in Dynamic Fixed Effects Logit Models," Papers 2303.00083, arXiv.org, revised Dec 2023.
    2. Rosario Crinò, 2009. "Offshoring, Multinationals And Labour Market: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 197-249, April.
    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, vol. 19(1), pages 95-108, March.
    4. Geishecker, Ingo, 2006. "The impact of international outsourcing on individual employment security: a micro level analysis," Discussion Papers 2006/17, Free University Berlin, School of Business & Economics.
    5. Alexander Hijzen & Mauro Pisu & Richard Upward & Peter W. Wright, 2011. "Employment, job turnover, and trade in producer services: UK firm‐level evidence," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 44(3), pages 1020-1043, August.
    6. Egger, Hartmut & Egger, Peter, 2005. "Labor market effects of outsourcing under industrial interdependence," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 349-363.
    7. Hongbo CAI & Hao CHEN & Xinhe LIU, 2012. "Offshoring And Employment Structure: Evidence From China," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 7(1(19)/ Sp), pages 35-47.
    8. Agnese, Pablo, 2009. "Japan and her dealings with offshoring: An empirical analysis with aggregate data," IESE Research Papers D/793, IESE Business School.
    9. Henk L.M. Kox, 2004. "The Contribution of Business Services to Aggregate Productivity Growth," Contributions to Economic Analysis, in: Fostering Productivity: Patterns, Determinants and Policy Implications, pages 243-264, Emerald Group Publishing Limited.
    10. Peter Huber & Peter Mayerhofer, 2006. "Wandel der Sektorstruktur in der Wirtschaftsregion "Centrope Europaregion Mitte"," WIFO Studies, WIFO, number 26623, February.
    11. Yiping Zhu, 2008. "Globalisation, Employment, and Wage Rate: What Does Literature Tell Us?," IMK Working Paper 07-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    12. Böckerman, Petri & Riihimäki, Elisa, 2009. "International outsourcing and labour demand: Evidence from Finnish firm-level data," MPRA Paper 16903, University Library of Munich, Germany.
    13. Gorg, Holger & Hanley, Aoife, 2005. "Labour demand effects of international outsourcing: Evidence from plant-level data," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 365-376.
    14. Sebastian Ion CEPTUREANU, 2015. "Competitiveness Of Smes," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 5(2), pages 55-67, June.

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    More about this item

    Keywords

    dynamic discrete choice; outsourcing; labor market turnover; fixed effects panel estimation;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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