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Offshoring, wages, and heterogeneity

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  • Kim, Sung-min
  • Hwang, Jin-tae

Abstract

Considering heterogeneous responses by skill group to material and service offshoring, we examine the relationship between offshoring and the individual wages of workers in the U.S. labor market. We find that offshoring has been beneficial for high-skill workers but detrimental for middle- and low-skill workers. In particular, service offshoring, which has been widespread since 2000, has severely affected the labor market, compared to material offshoring.

Suggested Citation

  • Kim, Sung-min & Hwang, Jin-tae, 2016. "Offshoring, wages, and heterogeneity," Japan and the World Economy, Elsevier, vol. 37, pages 65-72.
    • Handle: RePEc:eee:japwor:v:37-38:y:2016:i::p:65-72
    DOI: 10.1016/j.japwor.2016.04.001
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    References listed on IDEAS

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    1. Ingo Geishecker & Holger Görg, 2013. "Services offshoring and wages: evidence from micro data," Oxford Economic Papers, Oxford University Press, vol. 65(1), pages 124-146, January.
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    3. Rosario Crinò, 2010. "The Effects of Offshoring on Post‐displacement Wages: Evidence from the United States," The World Economy, Wiley Blackwell, vol. 33(12), pages 1836-1869, December.
    4. Rosario Crinò, 2010. "Service Offshoring and White-Collar Employment," Review of Economic Studies, Oxford University Press, vol. 77(2), pages 595-632.
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    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. Mary Amiti & Shang-Jin Wei, 2005. "Fear of service outsourcing: is it justified? [‘Location of vertically linked industries: agglomeration versus comparative advantage’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 20(42), pages 308-347.
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    1. repec:gdk:wpaper:53 is not listed on IDEAS
    2. Endoh, Masahiro, 2021. "Offshoring and working hours adjustments in a within-firm labor market," Journal of the Japanese and International Economies, Elsevier, vol. 60(C).
    3. Matilde Cardoso & Pedro Cunha Neves & Oscar Afonso & Elena Sochirca, 2021. "The effects of offshoring on wages: a meta-analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(1), pages 149-179, February.

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    More about this item

    Keywords

    Material offshoring; Service offshoring; Skill groups; Heterogeneity; Labor market outcomes;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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