IDEAS home Printed from https://ideas.repec.org/a/sae/ecdequ/v33y2019i1p19-38.html
   My bibliography  Save this article

Automation and Offshoring in Durable Goods Manufacturing: An Indiana Case Study

Author

Listed:
  • Timothy F. Slaper

Abstract

The loss of manufacturing jobs is largely attributed to either offshoring or automation. Using state-level data from the Annual Survey of Manufactures and unit record administrative data from the Indiana Department of Workforce Development, we determine the drivers of durable goods manufacturing employment losses in Indiana. We test a simple model that explains changes in industry production employment by changes in output, wages, intermediate input consumption, productivity, capital-to-labor ratios, or a proxy related to these explanatory variables. Using the unit record data, the authors assess the consequences of large layoff events on the wages of those who remain employed at a particular manufacturing establishment. The data suggest that offshoring was the primary driver for employment losses and productivity gains in Indiana, not automation. We also find that average wages for workers at establishments that experienced large redundancy events rose for those workers who remained after large layoff events.

Suggested Citation

  • Timothy F. Slaper, 2019. "Automation and Offshoring in Durable Goods Manufacturing: An Indiana Case Study," Economic Development Quarterly, , vol. 33(1), pages 19-38, February.
    • Handle: RePEc:sae:ecdequ:v:33:y:2019:i:1:p:19-38
    DOI: 10.1177/0891242418807557
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0891242418807557
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0891242418807557?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Robert C. Feenstra & Gordon H. Hanson, 1999. "The Impact of Outsourcing and High-Technology Capital on Wages: Estimates For the United States, 1979–1990," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 907-940.
    2. Melanie Arntz & Terry Gregory & Ulrich Zierahn, 2016. "The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis," OECD Social, Employment and Migration Working Papers 189, OECD Publishing.
    3. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The Geography of Trade and Technology Shocks in the United States," American Economic Review, American Economic Association, vol. 103(3), pages 220-225, May.
    4. Daron Acemoglu & Pascual Restrepo, 2017. "Robots and Jobs: Evidence from US Labor Markets," Boston University - Department of Economics - Working Papers Series dp-297, Boston University - Department of Economics.
    5. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    6. Susan HOUSEMAN, 2007. "Outsourcing, offshoring and productivity measurement in United States manufacturing," International Labour Review, International Labour Organization, vol. 146(1-2), pages 61-80, March.
    7. Cliff Waldman, 2016. "The Evolving Contours of Productivity Performance and Automation Investment in U.S. Manufacturing," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 51(4), pages 213-238, October.
    8. Karsten Bjerring Olsen, 2006. "Productivity Impacts of Offshoring and Outsourcing: A Review," OECD Science, Technology and Industry Working Papers 2006/1, OECD Publishing.
    9. Frey, Carl Benedikt & Osborne, Michael A., 2017. "The future of employment: How susceptible are jobs to computerisation?," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 254-280.
    10. Justin R. Pierce & Peter K. Schott, 2016. "The Surprisingly Swift Decline of US Manufacturing Employment," American Economic Review, American Economic Association, vol. 106(7), pages 1632-1662, July.
    11. J. Bradford Jensen & Lori G. Kletzer, 2005. "Tradable Services: Understanding the Scope and Impact of Services Outsourcing," Working Paper Series WP05-9, Peterson Institute for International Economics.
    12. Alan S. Blinder, 2009. "How Many US Jobs Might be Offshorable?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 10(2), pages 41-78, April.
    13. Daron Acemoglu & David Autor & David Dorn & Gordon H. Hanson & Brendan Price, 2016. "Import Competition and the Great US Employment Sag of the 2000s," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 141-198.
    14. Daron Acemoglu & Pascual Restrepo, 2020. "Robots and Jobs: Evidence from US Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2188-2244.
    15. Alan S. Blinder & Alan B. Krueger, 2013. "Alternative Measures of Offshorability: A Survey Approach," Journal of Labor Economics, University of Chicago Press, vol. 31(S1), pages 97-128.
    16. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 367-397.
    17. Susan Houseman & Christopher Kurz & Paul Lengermann & Benjamin Mandel, 2011. "Offshoring Bias in U.S. Manufacturing," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 111-132, Spring.
    18. Alan S. Blinder, 2009. "How Many US Jobs Might be Offshorable?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 10(2), pages 41-78, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. bernhard Boockmann, 2014. "Offshoring Potential and Employment Dynamics," IAW Discussion Papers 111, Institut für Angewandte Wirtschaftsforschung (IAW).
    2. Edouard Ribes, 2021. "Scoping the transformation of the professional services industry," Working Papers hal-01889350, HAL.
    3. Parteka, Aleksandra & Wolszczak-Derlacz, Joanna & Nikulin, Dagmara, 2024. "How digital technology affects working conditions in globally fragmented production chains: Evidence from Europe," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    4. Cirillo, Valeria & Evangelista, Rinaldo & Guarascio, Dario & Sostero, Matteo, 2021. "Digitalization, routineness and employment: An exploration on Italian task-based data," Research Policy, Elsevier, vol. 50(7).
    5. Iammarino, Simona & Rodríguez-Pose, Andrés & Gagliardi, Luisa, 2015. "Offshoring and the Geography of Jobs in Great Britain," CEPR Discussion Papers 10855, C.E.P.R. Discussion Papers.
    6. Sergio Ocampo, 2019. "A task-based theory of occupations with multidimensional heterogeneity," 2019 Meeting Papers 477, Society for Economic Dynamics.
    7. Malo, Miguel & Cueto, Begoña, 2019. "Do old and new labour market risks overlap? Automation, offshorability, and non-standard employment," MPRA Paper 95058, University Library of Munich, Germany.
    8. Muendler, Marc-Andreas, 2017. "Trade, technology, and prosperity: An account of evidence from a labor-market perspective," WTO Staff Working Papers ERSD-2017-15, World Trade Organization (WTO), Economic Research and Statistics Division.
    9. Melia, Elvis, 2020. "African jobs in the digital era: Export options with a focus on online labour," IDOS Discussion Papers 3/2020, German Institute of Development and Sustainability (IDOS).
    10. Wolcott, Erin L., 2021. "Employment inequality: Why do the low-skilled work less now?," Journal of Monetary Economics, Elsevier, vol. 118(C), pages 161-177.
    11. Reijnders, Laurie S.M. & de Vries, Gaaitzen J., 2018. "Technology, offshoring and the rise of non-routine jobs," Journal of Development Economics, Elsevier, vol. 135(C), pages 412-432.
    12. Ljubica Nedelkoska & Frank Neffke, 2019. "Skill Mismatch and Skill Transferability: Review of Concepts and Measurements," Papers in Evolutionary Economic Geography (PEEG) 1921, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2019.
    13. Peter Haiss & Bernhard Mahlberg & Daniel Michlits, 2021. "Industry 4.0–the future of Austrian jobs," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(1), pages 5-36, February.
    14. Baum, Christopher F & Lööf, Hans & Stephan, Andreas & Viklund-Ros, Ingrid, 2020. "The impact of offshoring on innovation and productivity: Evidence from Swedish manufacturing firms," Working Paper Series in Economics and Institutions of Innovation 486, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    15. Nuarpear Lekfuangfu & Voraprapa Nakavachara, 2020. "Reshaping Thailand's Labor Market Structure: The Unified Forces of Technology and Trade," PIER Discussion Papers 123, Puey Ungphakorn Institute for Economic Research.
    16. Jelena Reljic & Rinaldo Evangelista & Mario Pianta, 2019. "Digital technologies, employment and skills," LEM Papers Series 2019/36, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    17. Gunther Tichy, 2016. "Geht der Arbeitsgesellschaft die Arbeit aus?," WIFO Monatsberichte (monthly reports), WIFO, vol. 89(12), pages 853-871, December.
    18. Valeria Cirillo & Mario Pianta & Leopoldo Nascia, 2018. "Technology and Occupations in Business Cycles," Sustainability, MDPI, vol. 10(2), pages 1-25, February.
    19. Christopher F. Baum & Hans Lööf & Andreas Stephan & Ingrid Viklund-Ros, 2020. "The impact of offshoring on productivity and innovation: Evidence from Swedish manufacturing firms," Boston College Working Papers in Economics 1014, Boston College Department of Economics, revised 19 Apr 2021.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ecdequ:v:33:y:2019:i:1:p:19-38. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.