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Services offshoring and wages: Evidence from micro data

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  • Ingo Geishecker
  • Holger Görg

Abstract

This paper investigates the effects of services offshoring on wages using individual level data combined with industry information on offshoring. Our results show that services ofsshoring affects the real wage of low and medium skilled individuals negatively. By contrast, skilled workers benefit from services offshoring in terms of higher real wages. Hence, offshoring has contributed to a widening of the wage gap between skilled and less skilled workers. This result is obtained while controlling for individual and sectoral observed and unobserved heterogeneity. In particular, our empirical model also controls for the impact of technological change and offshoring materials

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1434.

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Length: 16 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:kie:kieliw:1434

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Keywords: Services offshoring; individual wages;

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References

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  1. Amiti, Mary & Wei, Shang-Jin, 2006. "Service Offshoring, Productivity and Employment: Evidence from the US," CEPR Discussion Papers 5475, C.E.P.R. Discussion Papers.
  2. Mary Amiti & Shang-Jin Wei, 2004. "Fear of Service Outsourcing: Is It Justified?," NBER Working Papers 10808, National Bureau of Economic Research, Inc.
  3. Robert C. Feenstra & Gordon H. Hanson, 1999. "The Impact Of Outsourcing And High-Technology Capital On Wages: Estimates For The United States, 1979-1990," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 907-940, August.
  4. Alex Hijzen & Mauro Pisu & Richard Upward & Peter Wright, . "Employment, Job Turnover and the Trade in Producer Services: Firm-level Evidence," Discussion Papers 07/37, University of Nottingham, GEP.
  5. Alexander Hijzen & Holger Görg & Robert C. Hine, 2005. "International Outsourcing and the Skill Structure of Labour Demand in the United Kingdom," Economic Journal, Royal Economic Society, vol. 115(506), pages 860-878, October.
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Cited by:
  1. Rosario Crinò, 2009. "Employment Effects of Service Offshoring: Evidence from Matched Firms," Development Working Papers 286, Centro Studi Luca d\'Agliano, University of Milano.
  2. Giuseppe Bognetti & Michele Santoni, 2010. "Can domestic unions gain from offshoring?," Journal of Economics, Springer, vol. 100(1), pages 51-67, May.
  3. Rosario Crinò, 2007. "Service Offshoring and White-Collar Employment," CESifo Working Paper Series 2040, CESifo Group Munich.
  4. Éva Polgár & Julia Wörz, 2010. "No risk and some fun? Trade and wages in the enlarged European Union," Empirica, Springer, vol. 37(2), pages 127-163, May.

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