We examine the impact on U.S. labor markets of offshore outsourcing in services to China and India. We also consider the reverse flow or 'inshoring' which is the sale of services produced in the United States to unaffiliated buyers in China and India. Using March-to-March matched CPS data for 1996-2006 we examine the impacts on (1) occupation and industry switching, (2) weeks spent unemployed as a share of weeks in the labor force, and (3) earnings. We precisely estimate small positive effects of inshoring and smaller negative effects of offshore outsourcing. The net effect is positive. To illustrate how small the effects are, suppose that over the next nine years all of inshoring and offshore outsourcing grew at rates experienced during 1996-2005 in business, professional and technical services i.e., in segments where China and India have been particularly strong. Then workers in occupations that are exposed to inshoring and offshore outsourcing (1) would switch 4-digit occupations 2 percent less often, (2) would spend 0.1 percent less time unemployed, and (3) would earn 1.5 percent more. These are not annual changes – they are changes over nine years – and are thus best described as small positive effects.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
14061.
Length: Date of creation: Jun 2008 Date of revision: Handle: RePEc:nbr:nberwo:14061
Note: ITI LS Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: ().
Related research
Keywords:
Find related papers by JEL classification: F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
This paper has been announced in the following NEP Reports:
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.:
Alan S. Blinder, 2005.
"Fear of Offshoring,"
Working Papers
83, Princeton University, Department of Economics, Center for Economic Policy Studies..
[Downloadable!]
Antràs, Pol & Helpman, Elhanan, 2004.
"Global Sourcing,"
CEPR Discussion Papers
4170, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions:
Pol Antràs & Elhanan Helpman, 2003.
"Global Sourcing,"
NBER Working Papers
10082, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Paul R. Bergin & Robert C. Feenstra & Gordon H. Hanson, 2007.
"Outsourcing and Volatility,"
NBER Working Papers
13144, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Bergin, Paul & Feenstra, Robert & Hanson, Gordon, 2006.
"Outsourcing and Volatility,"
Working Papers
06-28, University of California at Davis, Department of Economics.
Linda Goldberg & Joseph Tracy, 2001.
"Exchange Rates and Wages,"
NBER Working Papers
8137, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Gueorgui Kambourov & Iourii Manovskii, 2009.
"Occupational Specificity Of Human Capital,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 63-115, 02.
[Downloadable!] (restricted)
George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1992.
"On the Labor Market Effects of Immigration and Trade,"
NBER Chapters,
in: Immigration and the Workforce: Economic Consequences for the United States and Source Areas, pages 213-244
National Bureau of Economic Research, Inc.
[Downloadable!]
Other versions:
Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993.
"Earnings Losses of Displaced Workers,"
American Economic Review,
American Economic Association, vol. 83(4), pages 685-709, September.
[Downloadable!] (restricted)
Other versions:
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.)