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

  • Böckerman, Petri


    (Labour Institute for Economic Research)

  • Maliranta, Mika


    (ETLA - The Research Institute of the Finnish Economy)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7399.

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Length: 57 pages
Date of creation: May 2013
Date of revision:
Publication status: published in: Industrial Relations, 2013, 52 (4), 878-914
Handle: RePEc:iza:izadps:dp7399
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