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Offshoring and the Skill Structure of Labour Demand

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Author Info

  • Gaaitzen De Vries
  • Neil Foster

    () (The Vienna Institute for International Economic Studies, wiiw)

  • Robert Stehrer

    () (The Vienna Institute for International Economic Studies, wiiw)

Abstract

In this paper we examine the link between international outsourcing – or offshoring – and the skill structure of labour demand for a sample of 40 countries over the period 1995 2009. The paper uses data from the recently compiled World-Input-Output-Database (WIOD) to estimate a system of variable factor demand equations. These data allow us to exploit both a cross-country and cross-industry dimension and split employment into three skill categories. Our results indicate that while offshoring has impacted negatively upon all skill levels, the largest impacts have been observed for medium-skilled (and to a lesser extent high-skilled) workers. Such results are consistent with recent evidence indicating that medium-skilled workers have suffered to a greater extent than other skill types in recent years.

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Bibliographic Info

Paper provided by The Vienna Institute for International Economic Studies, wiiw in its series wiiw Working Papers with number 86.

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Length: 22 pages including 8 Tables and 4 Figures
Date of creation: Jun 2012
Date of revision:
Publication status: Published as wiiw Working Paper
Handle: RePEc:wii:wpaper:86

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Keywords: offshoring; trade; wages; labour demand;

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  1. Marcel P. Timmer & Robert Inklaar & Mary O'Mahony & Bart van Ark, 2011. "Productivity and Economic Growth in Europe: A Comparative Industry Perspective," International Productivity Monitor, Centre for the Study of Living Standards, vol. 21, pages 3-23, Spring.
  2. Autor, David & Dorn, David, 2009. "This Job Is 'Getting Old:' Measuring Changes in Job Opportunities Using Occupational Age Structure," IZA Discussion Papers 3970, Institute for the Study of Labor (IZA).
  3. Jose Campa & Linda S. Goldberg, 1997. "The evolving external orientation of manufacturing: a profile of four countries," Economic Policy Review, Federal Reserve Bank of New York, issue Jul, pages 53-81.
  4. Michaels, Guy & Natraj, Ashwini & Van Reenen, John, 2010. "Has ICT Polarized Skill Demand? Evidence from Eleven Countries over 25 years," CEPR Discussion Papers 7898, C.E.P.R. Discussion Papers.
  5. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November.
  6. 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.
  7. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
  8. George J. Borjas & Richard B. Friedman & Lawrence F. Katz, 1997. "How Much Do Immigration and Trade Affect Labor Market Outcomes?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 1-90.
  9. Vanessa Strauss-Kahn, 2004. "The Role of Globalization in the Within-Industry Shift Away from Unskilled Workers in France," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 209-234 National Bureau of Economic Research, Inc.
  10. Falk, Martin & Koebel, Bertrand M, 2002. " Outsourcing, Imports and Labour Demand," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 567-86, December.
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