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The effects of offshoring on wages: a meta-analysis

Author

Listed:
  • Matilde Cardoso

    (Universidade do Porto)

  • Pedro Cunha Neves

    (Universidade da Beira Interior, and CEFAGE-UBI)

  • Oscar Afonso

    (Universidade do Porto, and CEFUP)

  • Elena Sochirca

    (Universidade da Beira Interior, NECE, and NIPE)

Abstract

Offshoring, either as FDI or offshore outsourcing, is a phenomenon of increasing importance that has been widely studied in the economics literature. Studies analysing the impact of offshoring on the labour market report divergent results. In this paper we develop a meta-analysis of the empirical literature that estimates the effect of offshoring on wages. We find that, after correcting for the presence of publication bias, the average effect is not significantly different from zero in either the origin or the destination countries. We also find that the wage impact of offshoring depends on methodological characteristics of the primary studies, such as the way offshoring is measured, the nature of goods/services that are offshored, the workers’ skill level, the unit of analysis, the structure of the data, and the estimation technique.

Suggested Citation

  • 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.
  • Handle: RePEc:spr:weltar:v:157:y:2021:i:1:d:10.1007_s10290-020-00385-z
    DOI: 10.1007/s10290-020-00385-z
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    More about this item

    Keywords

    Offshoring; Foreign direct investment; Offshore outsourcing; Wages; Meta-analysis;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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