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Offshoring and the onshore composition of tasks and skills

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  • Becker, Sascha O.
  • Ekholm, Karolina
  • Muendler, Marc-Andreas

Abstract

We analyze the relationship between offshoring and the onshore workforce composition in German multinational enterprises (MNEs), using plant data that allow us to discern tasks, occupations, and workforce skills. Offshoring is associated with a statistically significant shift towards more non-routine and more interactive tasks, and with a shift towards highly educated workers. The shift towards highly educated workers is in excess of what is implied by changes in either the task or the occupational composition. Offshoring to low-income countries—with the exception of Central and Eastern European countries—is associated with stronger onshore responses. We find offshoring to predict between 10 and 15% of observed changes in wage-bill shares of highly educated workers and measures of non-routine and interactive tasks.

Suggested Citation

  • Becker, Sascha O. & Ekholm, Karolina & Muendler, Marc-Andreas, 2013. "Offshoring and the onshore composition of tasks and skills," Journal of International Economics, Elsevier, vol. 90(1), pages 91-106.
  • Handle: RePEc:eee:inecon:v:90:y:2013:i:1:p:91-106
    DOI: 10.1016/j.jinteco.2012.10.005
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    More about this item

    Keywords

    Trade in tasks; Multinational enterprises; Demand for labor; Linked employer–employee data;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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