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The Impact Of International Outsourcing On Labour Market Dynamics In Germany

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  • Ronald Bachmann
  • Sebastian Braun

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 has a positive but small impact on overall job stability in the manufacturing sector, and considerably increases job stability in the service sector. However, the effect of outsourcing varies strongly across skill levels and age groups, with negative effects for some workers. 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.

Suggested Citation

  • Ronald Bachmann & Sebastian Braun, 2011. "The Impact Of International Outsourcing On Labour Market Dynamics In Germany," Scottish Journal of Political Economy, Scottish Economic Society, vol. 58(1), pages 1-28, February.
  • Handle: RePEc:bla:scotjp:v:58:y:2011:i:1:p:1-28
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    File URL: http://hdl.handle.net/10.1111/j.1467-9485.2010.00535.x
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    Cited by:

    1. Holger Görg & Dennis Görlich, 2015. "Offshoring, wages and job security of temporary workers," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(3), pages 533-554, August.
    2. repec:iab:iabdpa:201811 is not listed on IDEAS
    3. Craig P. Aubuchon & Subhayu Bandyopadhyay & Sumon Bhaumik, 2012. "The extent and impact of outsourcing: evidence from Germany," Review, Federal Reserve Bank of St. Louis, issue July, pages 287-304.
    4. Ronald Bachmann & Daniel Baumgarten & Joel Stiebale, 2011. "Cross-border Investment, Heterogeneous Workers, and Employment Security – Evidence from Germany," Ruhr Economic Papers 0268, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. repec:ucm:wpaper:05-14 is not listed on IDEAS
    6. Vicente Donoso & Víctor Martín & Asier Minondo, 2015. "Does Competition from China Raise the Probability of Becoming Unemployed? An Analysis Using Spanish Workers’ Micro-Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(2), pages 373-394, January.
    7. 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.
    8. Thomas Kemeny & David Rigby & Abigail Cooke, 2015. "Cheap Imports and the Loss of US Manufacturing Jobs," The World Economy, Wiley Blackwell, vol. 38(10), pages 1555-1573, October.
    9. Lo Turco, Alessia & Maggioni, Daniela & Picchio, Matteo, 2013. "Offshoring and job stability: Evidence from Italian manufacturing," Structural Change and Economic Dynamics, Elsevier, vol. 26(C), pages 27-46.
    10. Vicente Donoso & Víctor Martín & Asier Minondo, 2014. "Import competition from China and unemployment. An analysis using Spanish workers’micro-data," Working Papers del Instituto Complutense de Estudios Internacionales 1405, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.
    11. Joachim Wagner, 2011. "Offshoring and firm performance: self-selection, effects on performance, or both?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(2), pages 217-247, June.
    12. repec:zbw:rwirep:0268 is not listed on IDEAS
    13. Martin Borowiecki & Bernhard Dachs & Doris Hanzl-Weiss & Steffen Kinkel & Johannes Pöschl & Magdolna Sass & Thomas Christian Schmall & Robert Stehrer & Andrea Szalavetz, 2012. "Global Value Chains and the EU Industry," wiiw Research Reports 383, The Vienna Institute for International Economic Studies, wiiw.
    14. repec:mbr:jmonec:v:8:y:2013:i:1:p:109-139 is not listed on IDEAS
    15. bernhard Boockmann, 2014. "Offshoring Potential and Employment Dynamics," IAW Discussion Papers 111, Institut für Angewandte Wirtschaftsforschung (IAW).
    16. Bachmann, Ronald & Baumgarten, Daniel & Stiebale, Joel, 2011. "Cross-border Investment, Heterogeneous Workers, and Employment Security – Evidence from Germany," Ruhr Economic Papers 268, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    17. Baumgarten, Daniel, 2009. "International Outsourcing, the Nature of Tasks, and Occupational Stability – Empirical Evidence for Germany," Ruhr Economic Papers 108, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    18. repec:zbw:rwirep:0108 is not listed on IDEAS

    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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