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"Fear" and Offshoring: The Scope and Potential Impact of Imports and Exports of Services

Author

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  • J. Bradford Jensen

    () (Peterson Institute for International Economics)

  • Lori G. Kletzer

    () (Peterson Institute for International Economics)

Abstract

Commentators, including Princeton University's Alan Blinder, estimate 40 million jobs could be at risk of being offshored over the next 20 years and suggest American workers should specialize in services that can be delivered face-to-face. In contrast, Jensen and Kletzer expect the process of globalization in services will proceed much as it has in manufacturing: They estimate only 15-20 million jobs are at risk of being offshored to low-wage, labor-abundant countries; approximately 40 percent of these jobs will be in the manufacturing sector, long considered "at risk." They expect these losses to be offset by job gains in high-wage activities from services exporting. The United States will retain its comparative advantage in high-skill, high-wage production and increase these activities in tradable service industries as trade barriers diminish. While the loss of low-wage activities that are offshored and the gain from high-wage service exports will cause dislocation, the globalization of services production is likely to have productivity-enhancing effects similar to the impact of globalization in the manufacturing sector, offering significant potential to improve living standards in the United States and around the world.

Suggested Citation

  • J. Bradford Jensen & Lori G. Kletzer, 2008. ""Fear" and Offshoring: The Scope and Potential Impact of Imports and Exports of Services," Policy Briefs PB08-1, Peterson Institute for International Economics.
  • Handle: RePEc:iie:pbrief:pb08-1
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    File URL: https://piie.com/publications/policy-briefs/fear-and-offshoring-scope-and-potential-impact-imports-and-exports
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    References listed on IDEAS

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    1. Catherine L. Mann, 2003. "Globalization of IT Services and White Collar Jobs: The Next Wave of Productivity Growth," Policy Briefs PB03-11, Peterson Institute for International Economics.
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    Cited by:

    1. Andrés Zahler & Leonardo Iacovone & Aaditya Mattoo, 2014. "Trade and Innovation in Services: Evidence from a Developing Economy," The World Economy, Wiley Blackwell, vol. 37(7), pages 953-979, July.
    2. Raj Nallari & Breda Griffith & Yidan Wang & Soamiely Andriamananjara & Derek H. C. Chen & Rwitwika Bhattacharya, 2012. "A Primer on Policies for Jobs," World Bank Publications, The World Bank, number 2390.
    3. Huffman, Wallace, 2009. "Investing in People for the 21st Century," Staff General Research Papers Archive 13127, Iowa State University, Department of Economics.
    4. Elsie L. Echeverri-Carroll, 2013. "Offshore assembly and service industries in Latin America," Chapters,in: Handbook of Industry Studies and Economic Geography, chapter 17, pages 411-429 Edward Elgar Publishing.
    5. Kent Eliasson & Pär Hansson, 2016. "Are workers more vulnerable in tradable industries?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 283-320.
    6. repec:wsi:gjexxx:v:01:y:2012:i:02:n:s2251361212500097 is not listed on IDEAS
    7. Lutz Arnold & Stefanie Trepl, 2015. "A North-South Trade Model of Offshoring and Unemployment," Open Economies Review, Springer, vol. 26(5), pages 999-1039, November.
    8. Lundan, Sarianna & Tolvanen, Juha, 2008. "Regional and Global Patterns of Internationalisation of Finnish MNEs," Discussion Papers 1170, The Research Institute of the Finnish Economy.

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