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How Offshoring Can Affect the Industries’ Skill Composition

  • Daniel Horgos

    (Helmut Schmidt University and Centro Studi Luca d’Agliano)

  • Lucia Tajoli

    (Politecnico di Milano and KITeS – Bocconi University)

While most offshoring literature focus on the effects on relative wages, other implications do not receive the necessary attention. This paper investigates effects on the industries’ skill ratio. It sum-marizes the empirical literature, discusses theoretical findings, and provides first empirical evidence for Germany. As results show, effects are mainly driven by the industry where offshoring takes place. In high skill intensive industries, the high skill labor ratio increases (vice versa for low skill intensive industries). Since this result is in line with other empirical findings but seems to contradict with theory, the paper additionally discusses possible explanations.

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Paper provided by Centro Studi Luca d'Agliano, University of Milano in its series Development Working Papers with number 296.

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Length: 20
Date of creation: 31 Jul 2010
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Handle: RePEc:csl:devewp:296
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  1. Vanessa Strauss-Kahn, 2004. "The Role of Globalization in the Within-Industry Shift Away from Unskilled Workers in France," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 209-234 National Bureau of Economic Research, Inc.
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  6. Richard Baldwin & Frédéric Robert-Nicoud, 2010. "Trade-in-goods and trade-in-tasks: An Integrating Framework," NBER Working Papers 15882, National Bureau of Economic Research, Inc.
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  8. Hijzen, Alexander & Görg, Holger & Hine, Robert C., 2004. "International Outsourcing and the Skill Structure of Labour Demand in the United Kingdom," IZA Discussion Papers 1249, Institute for the Study of Labor (IZA).
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  16. repec:cii:cepiei:2012-q3-131-1 is not listed on IDEAS
  17. 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, Oxford University Press, vol. 109(2), pages 367-397.
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  22. Horgos, Daniel, 2009. "The Elasticity of Substitution and the Sector Bias of International Outsourcing: Solving the Puzzle," Working Paper 88/2009, Helmut Schmidt University, Hamburg.
  23. Arndt, Sven W., 1997. "Globalization and the open economy," The North American Journal of Economics and Finance, Elsevier, vol. 8(1), pages 71-79.
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