Trade, tasks, and training: The effect of offshoring on individual skill upgrading
AbstractWe offer a theoretical explanation and empirical evidence for a positive link between increased offshoring and individual skill upgrading. Skill upgrading takes the form of on-the-job training, complementing the existing literature, which mainly focuses on the retraining of workers after a direct job displacement through offshoring. To establish a link between offshoring and on-the-job training, we introduce an individual skill upgrading margin into the small-open-economy version of the Grossman and Rossi-Hansberg (2008) model of offshoring. In our model offshoring, by scaling up workers' wages, creates previously unexploited skill upgrading possibilities and, thus, leads to more on-the-job training. Using data from German manufacturing, we find strong empirical support for the prediction that increased offshoring is positively related to individual on-the-job training participation. --
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Bibliographic InfoPaper provided by University of Tuebingen, Faculty of Economics and Social Sciences in its series University of Tuebingen Working Papers in Economics and Finance with number 64.
Date of creation: 2013
Date of revision:
Offshoring; Tasks; Skill upgrading; On-the-job training;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-22 (All new papers)
- NEP-EUR-2013-11-22 (Microeconomic European Issues)
- NEP-LAB-2013-11-22 (Labour Economics)
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