Immigration and Offshoring: two forces of globalisation and their impact on employment and the bargaining power of occupational groups

This paper estimates conditional demand models to examine the impact of immigration and different measures of offshoring on the labour demand and demand elasticities of native workers in four different types of occupational groups: managers/professionals, clerical workers, craft (skilled) workers and manual workers. The analysis is conducted for the period 2008–2017 for four economies Austria, Belgium, France and Spain. Our results point to important and occupation-specific direct and indirect effects: both offshoring – particularly services offshoring – and immigration have negative direct employment effects on all occupations, but native clerks and manual workers are affected the most, and native managers/professionals the least. Our results also identify an important elasticity-channel of immigration and offshoring and show that some groups of native workers can also gain from globalisation through an improvement in their wage-bargaining position. Overall, our results indicate a deterioration in the bargaining power of native manual workers arising from both immigration and offshoring and an improvement in the bargaining position of native craft workers.