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International Outsourcing and the Productivity of Low-skilled Labour in the EU

  • Hartmut Egger
  • Peter Egger

    (WIFO)

This article presents first insights into the role of international outsourcing on the productivity of low-skilled workers in EU manufacturing. Whereas in the short run international outsourcing exhibits a negative marginal effect on real value added per low-skilled worker, the long-run parameter estimates reveal a positive impact. This may be explained by imperfections in European labor and goods markets, which prohibit an immediate adjustment in the factor employment and the output structure. The change in the outsourcing intensity since 1993 alone acounts for a long-run increase of about 6.0% in the real value added per low-skilled worker. (JEL C33, F14, F15) Copyright 2006, Oxford University Press.

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Paper provided by WIFO in its series WIFO Working Papers with number 152.

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Length: 20 pages
Date of creation:
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Handle: RePEc:wfo:wpaper:y:2001:i:152
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  1. Donald Siegel & Zvi Griliches, 1991. "Purchased Services, Outsourcing, Computers, and Productivity in Manufacturing," NBER Working Papers 3678, National Bureau of Economic Research, Inc.
  2. Pirotte, Alain, 1999. "Convergence of the static estimation toward the long run effects of dynamic panel data models," Economics Letters, Elsevier, vol. 63(2), pages 151-158, May.
  3. repec:att:wimass:9701 is not listed on IDEAS
  4. Hine, Robert C & Wright, Peter W, 1998. "Trade with Low Wage Economies, Employment and Productivity in UK Manufacturing," Economic Journal, Royal Economic Society, vol. 108(450), pages 1500-1510, September.
  5. Wolfgang Keller, 1997. "Trade Patterns, Technology Flows, and Productivity Growth," International Trade 9702001, EconWPA.
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