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The Impact of International Outsourcing on Labour Market Dynamics in Germany

  • Ronald Bachmann
  • Sebastian Braun

Using an administrative data set containing daily information on individual workers' employment histories, we investigate how workers' labour market transitions are affected by international out- sourcing. In order to do so, we estimate hazard rate models for match separations, as well as for worker flows from employment to another job, to unemployment, and to out of the labour force. Outsourcing is found to have no significant impact on job stability in the manufacturing sector, but it is associated with increased job stability in the service sector. Furthermore, especially in the service sector the effect of outsourcing varies across skill levels. An analysis of the different labour market flows shows that labour market transitions are not affected symmetrically by in- ternational outsourcing.

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Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2008-020.

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Length: 23 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:hum:wpaper:sfb649dp2008-020
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