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Outsourcing and Employment: A Decomposition Approach

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  • W. Koller
  • Robert Stehrer

    (wiiw)

Abstract

In this paper we study the employment effects of changes in the levels and patterns of outsourcing in the Austrian economy over the periods 1995-2000 and 2000-2003. Based on an input-output framework we apply a hierarchical decomposition analysis to disentangle the employment effects of changes in labour productivity, technical input coefficients and final demand components. Outsourcing is modelled as changes in the shares of domestically produced intermediates. For this some further details can be derived by distinguishing between intermediate imports of energy, material and service products or according to educational intensities of the imported intermediate products. Following this approach first allows to study the direct and indirect effects of changes in the levels and structures of outsourcing.Second, the framework takes account of all 60 sectors (products) of the economy and thus also includes employment effects of service offshoring. Third, we also calculate the employment effects for three employment groups distinguished by educational attainment levels. This paper thus provides a comprehensive picture of employment effects of outsourcing in the Austrian economy.

Suggested Citation

  • W. Koller & Robert Stehrer, 2008. "Outsourcing and Employment: A Decomposition Approach," FIW Research Reports series I-018, FIW.
    • Handle: RePEc:wsr:ecbook:2008:i:i-018
    as

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    References listed on IDEAS

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    1. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 240-245, May.
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    4. Clopper Almon, 2000. "Product-to-Product Tables via Product-Technology with No Negative Flows," Economic Systems Research, Taylor & Francis Journals, vol. 12(1), pages 27-43.
    5. Erik Dietzenbacher & Bart Los, 1998. "Structural Decomposition Techniques: Sense and Sensitivity," Economic Systems Research, Taylor & Francis Journals, vol. 10(4), pages 307-324.
    6. Brian Wixted & Norihiko Yamano & Colin Webb, 2006. "Input-Output Analysis in an Increasingly Globalised World: Applications of OECD's Harmonised International Tables," OECD Science, Technology and Industry Working Papers 2006/7, OECD Publishing.
    7. Arndt, Sven W. & Kierzkowski, Henryk (ed.), 2001. "Fragmentation: New Production Patterns in the World Economy," OUP Catalogue, Oxford University Press, number 9780199243310.
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    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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