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Outsourcing, Occupational Restructuring, and Employee Well-Being: Is There a Silver Lining?

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  • Böckerman, Petri

    (Labour Institute for Economic Research)

  • Maliranta, Mika

    (ETLA - The Research Institute of the Finnish Economy)

Abstract

This paper examines the relationship between outsourcing and various aspects of employee well-being by devoting special attention to the role of occupational restructuring as a conveying mechanism. Using linked employer-employee data, we find that offshoring involves job destruction, especially when the destination is a low-wage country. In such circumstances, staying employees' job satisfaction is reduced. However, the relationship between outsourcing and employee well-being is not entirely negative. Our evidence also shows that offshoring to high-wage countries stimulates the vertical mobility of employees in affected firms in a manner that improves perceived well-being, particularly in terms of better prospects for promotion.

Suggested Citation

  • Böckerman, Petri & Maliranta, Mika, 2013. "Outsourcing, Occupational Restructuring, and Employee Well-Being: Is There a Silver Lining?," IZA Discussion Papers 7399, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp7399
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    2. Leone Leonida & Marianna Marra & Sergio Scicchitano & Antonio Giangreco & Marco Biagetti, 2020. "Estimating the Wage Premium to Supervision for Middle Managers in Different Contexts: Evidence from Germany and the UK," Work, Employment & Society, British Sociological Association, vol. 34(6), pages 1004-1026, December.
    3. Fonseca, Tiago & Lima, Francisco & Pereira, Sonia C., 2018. "Understanding productivity dynamics: A task taxonomy approach," Research Policy, Elsevier, vol. 47(1), pages 289-304.
    4. Sari Kerr & Terhi Maczulskij & Mika Maliranta, 2020. "Within and between firm trends in job polarization: the roles of globalization and technology [The skill complementarity of broadband internet]," Journal of Economic Geography, Oxford University Press, vol. 20(4), pages 1003-1039.
    5. Colantone, Italo & Crinò, Rosario & Ogliari, Laura, 2019. "Globalization and mental distress," Journal of International Economics, Elsevier, vol. 119(C), pages 181-207.
    6. Böckerman, Petri & Kauhanen, Antti & Maliranta, Mika, 2012. "ICT and occupation-based measures of organisational change: Firm and employee outcomes," MPRA Paper 43302, University Library of Munich, Germany.
    7. Merja Kauhanen, 2012. "The impact of the near superior’s management on worker wellbeing, retirement intentions, and establishment productivity," Working Papers 279, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    8. Liu, Runjuan & Trefler, Daniel, 2019. "A sorted tale of globalization: White collar jobs and the rise of service offshoring," Journal of International Economics, Elsevier, vol. 118(C), pages 105-122.

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    More about this item

    Keywords

    subjective well-being; working conditions; downsizing; offshoring; outsourcing; globalization; job satisfaction;
    All these keywords.

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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