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The Impact of International Outsourcing on Labour Market Dynamics in Germany

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Author Info
Ronald Bachmann ()
Sebastian Braun

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Abstract

Using an administrative data set containing daily information on individual workers’ employment histories, we investigate how workers’ labour market transitions are affected by international outsourcing. In order to do so,we estimate hazard rate models for match separations, as well as for worker flows from employment to another job, to unemployment, and to nonparticipation. Outsourcing is found to have no significant impact on overall job stability in the manufacturing sector, but it is associated with increased job stability in the service sector. Furthermore, the effect of outsourcing varies strongly across skill levels and age groups.This is especially the case in the manufacturing sector, where the hazard of transiting to nonemployment rises with international outsourcing for medium-skilled and older workers.

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Publisher Info
Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0053.

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Length: 29 pages
Date of creation: Jul 2008
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Handle: RePEc:rwi:repape:0053

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Related research
Keywords: Job stability; labour market transitions; worker flows; outsourcing; duration analysis;

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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
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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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.:
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  2. Hartmut Egger & Peter Egger, 2006. "International Outsourcing and the Productivity of Low-Skilled Labor in the EU," Economic Inquiry, Oxford University Press, vol. 44(1), pages 98-108, January. [Downloadable!] (restricted)
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  3. Machin, Stephen & Manning, Alan, 1999. "The causes and consequences of longterm unemployment in Europe," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 47, pages 3085-3139 Elsevier. [Downloadable!] (restricted)
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  6. Robert C. Feenstra, 2000. "The Impact of International Trade on Wages," NBER Books, National Bureau of Economic Research, Inc, number feen00-1, September.
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  8. Robert C. Feenstra & Gordon H. Hanson, 1996. "Globalization, Outsourcing, and Wage Inequality," NBER Working Papers 5424, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  19. Dale T. Mortensen & Christopher A. Pissarides, 1999. "Job Reallocation, Employment Fluctuations and Unemployment," CEP Discussion Papers dp0421, Centre for Economic Performance, LSE.
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  20. 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. [Downloadable!]
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  22. Abbring, Jaap H & van den Berg, Gerard J, 2007. "The Unobserved Heterogeneity Distribution in Duration Analysis," CEPR Discussion Papers 6219, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  23. Ronald Bachmann & Michael C. Burda, 2007. "Sectoral Transformation, Turbulence, and Labour Market Dynamics in Germany," SFB 649 Discussion Papers SFB649DP2007-008, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany. [Downloadable!]
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  24. Fitzenberger, Bernd & Wilke, Ralf A., 2004. "Unemployment Durations in West-Germany Before and After the Reform of the Unemployment Compensation System During the 1980s," ZEW Discussion Papers 04-24, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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  26. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May. [Downloadable!] (restricted)
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  28. Jakob Roland Munch, 2005. "International Outsourcing and Individual Job Separations," Discussion Papers 05-11, University of Copenhagen. Department of Economics. [Downloadable!]
  29. 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. [Downloadable!] (restricted)
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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. Daniel Baumgarten, 2009. "International Outsourcing, the Nature of Tasks, and Occupational Stability – Empirical Evidence for Germany," Ruhr Economic Papers 0108, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen. [Downloadable!]
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