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The impact of material and service outsourcing on employment in Thailand's manufacturing industries

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  • Shandre Thangavelu
  • Aekapol Chongvilaivan

Abstract

With increasing emphasis on the importance of outsourcing, the 'fear of job losses' has been of significant interest, not only in the developed countries, but also in the developing countries. In this article, we empirically investigate the impacts of intermediate inputs (material) and services outsourcing on the relative demands for skilled and unskilled labour in Thailand's manufacturing sectors from 1999 to 2003. Based on the aggregation of establishment-level data at 4-digit industrial classification, we find that both intermediate inputs and service outsourcing are relatively skill-biased. Further, our results show that intermediate inputs outsourcing has negative impacts on the relative demands for skilled and unskilled workers, whereas service outsourcing shifts the demand towards skilled workers at the expense of unskilled workers.

Suggested Citation

  • Shandre Thangavelu & Aekapol Chongvilaivan, 2011. "The impact of material and service outsourcing on employment in Thailand's manufacturing industries," Applied Economics, Taylor & Francis Journals, vol. 43(27), pages 3931-3944.
  • Handle: RePEc:taf:applec:v:43:y:2011:i:27:p:3931-3944 DOI: 10.1080/00036841003742595
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