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Trade, tasks and training: The effect of offshoring on individual skill upgrading

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  • Jan Hogrefe
  • Jens Wrona

Abstract

We offer a theoretical explanation and empirical evidence for a positive link between increased offshoring and individual skill upgrading. Skill upgrading takes the form of on‐the‐job training, complementing the existing literature, which mainly focuses on the retraining of displaced workers. To establish a link between offshoring and on‐the‐job training, we introduce an individual skill upgrading margin into the Grossman and Rossi‐Hansberg model of offshoring. By scaling up worker's wages, offshoring creates previously unexploited skill upgrading possibilities, which lead to more training. Using data from German manufacturing, we establish a causal link between industry‐level offshoring growth and increased individual skill upgrading. Commerce, tâches et formation : les effets de la délocalisation sur la mise à niveau des habiletés individuelles. Les auteurs offrent une explication théorique et des résultats empiriques qui supportent le fait qu’il y a un lien positif entre une délocalisation accrue et une mise à niveau des habiletés individuelles. La mise à niveau des habiletés prend la forme de formation en entreprise. Voilà qui complémente la littérature existante qui met surtout l’accent sur la formation‐recyclage des travailleurs déplacés. Pour faire le lien entre délocalisation et formation en entreprise, on introduit une amélioration des habiletés individuelles à la marge dans le modèle de délocalisation de Grossman & Rossi‐Hansberg. En augmentant les salaires des travailleurs, la délocalisation crée des possibilités d’amélioration d’habiletés inexploitées antérieurement, ce qui entraîne plus de formation. À l’aide de données sur le secteur manufacturier en Allemagne, on établit un lien causal entre la croissance de la délocalisation au niveau de l’industrie et l’accroissement de l’amélioration des habiletés individuelles.

Suggested Citation

  • Jan Hogrefe & Jens Wrona, 2015. "Trade, tasks and training: The effect of offshoring on individual skill upgrading," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(4), pages 1537-1560, November.
  • Handle: RePEc:wly:canjec:v:48:y:2015:i:4:p:1537-1560
    DOI: 10.1111/caje.12156
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