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Offshoring in Europe—Evidence of a Two-Way Street from Denmark

  • Peter D. Ørberg Jensen


    (Copenhagen Business School)

  • Jacob Funk Kirkegaard


    (Institute for International Economics)

  • Nicolai Søndergaard Laugesen


    (Rambøll Management)

Based on a large Danish survey of companies in tradable goods and services sectors, this working paper presents the results of offshoring and its impact on jobs, adding new perspectives to the globalization debate. Globalization entails a cross-border flow of jobs, but contrary to the mainstream media portrayal of globalization, it is not a one-way but a two-way street. In 2002–05 more jobs were created as a result of offshoring of activities into eastern Denmark from companies outside Denmark (i.e., inshored to Denmark) than were eliminated due to offshoring from companies in the Danish region. Overall, the employment effects of both offshoring and inshoring were found to be limited to less than 1 percent of all jobs either lost to offshoring or gained via inshoring. For Denmark, the worries in purely numerical terms regarding the employment effects of globalization seem overly alarmist. However, the trends revealed in the study do pose challenges for low-skilled workers—the group most negatively affected—and for highly skilled specialists, who face pressure to constantly upgrade their skills. Policy implications can be drawn in view of our results to ensure that labor markets are able to meet the demands of globalizing firms.

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Paper provided by Peterson Institute for International Economics in its series Working Paper Series with number WP06-3.

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Date of creation: Jun 2006
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Handle: RePEc:iie:wpaper:wp06-3
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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.
  2. James Markusen, 2005. "Modeling the Offshoring of White-Collar Services: From Comparative Advantage to the New Theories of Trade and FDI," NBER Working Papers 11827, National Bureau of Economic Research, Inc.
  3. Jagdish Bhagwati & Arvind Panagariya & T. N. Srinivasan, 2004. "The Muddles over Outsourcing," International Trade 0408004, EconWPA.
  4. Peter Maskell & Torben Pedersen & Bent Petersen & Jens Dick-Nielsen, 2007. "Learning Paths to Offshore Outsourcing: From Cost Reduction to Knowledge Seeking," Industry and Innovation, Taylor & Francis Journals, vol. 14(3), pages 239-257.
  5. Jacob Funk Kirkegaard, 2005. "Outsourcing and Offshoring: Pushing the European Model Over the Hill, Rather Than Off the Cliff!," Working Paper Series WP05-1, Peterson Institute for International Economics.
  6. Edward M. Graham, 2000. "Fighting the Wrong Enemy: Antiglobal Activists and Multinational Enterprises," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 91.
  7. Paul A. Samuelson, 2004. "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 135-146, Summer.
  8. Kakabadse, Andrew & Kakabadse, Nada, 2002. "Trends in Outsourcing:: Contrasting USA and Europe," European Management Journal, Elsevier, vol. 20(2), pages 189-198, April.
  9. Diana Farrell, 2005. "Offshoring: Value Creation through Economic Change," Journal of Management Studies, Wiley Blackwell, vol. 42(3), pages 675-683, 05.
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