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Outsourcing Potentials and International Tradability of Jobs. Evidence from German Micro-Level Data

  • Koch, Andreas
  • Brändle, Tobias

We analyze the offshorability of jobs using the German Qualifications and Career Survey. The paper differentiates between outsourcing potential and international tradability and systematically uses a large set of potential determinants of organizational and spatial relocation derived from the existing literature on offshoring. Applying principal component analysis, we are able to compute two indicators explaining both the outsourcing potential and the international tradability of an individual employee according to the characteristics of the job performed. The results show that there is significant variation along the two dimensions across tasks, occupations, and industries. We apply our results to analyze the effects of outsourcing potential and international tradability on individual income and find that especially the latter has a negative effect. Moreover, our computed indicators can be used to further investigate the economic effects of offshoring potential.

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Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order with number 79727.

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Date of creation: 2013
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Handle: RePEc:zbw:vfsc13:79727
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  1. Hogrefe, Jan, 2013. "Offshoring and relative labor demand from a task perspective," ZEW Discussion Papers 13-067, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. Arnaud Costinot & Lindsay Oldenski & James Rauch, 2011. "Adaptation and the Boundary of Multinational Firms," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 298-308, February.
  3. Pol Antras & Elhanan Helpman, 2003. "Global Sourcing," Harvard Institute of Economic Research Working Papers 2005, Harvard - Institute of Economic Research.
  4. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content Of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1279-1333, November.
  5. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  6. Antras, Pol, 2003. "Firms, Contracts, and Trade Structure," Scholarly Articles 3196328, Harvard University Department of Economics.
  7. Oliver Hart & John Moore, 1988. "Property Rights and the Nature of the Firm," Working papers 495, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Becker, Sascha O. & Ekholm, Karolina & Muendler, Marc-Andreas, 2009. "Offshoring and the Onshore Composition of Tasks and Skills," CEPR Discussion Papers 7391, C.E.P.R. Discussion Papers.
  9. Grossman, Sanford J & Hart, Oliver, 1985. "The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration," CEPR Discussion Papers 70, C.E.P.R. Discussion Papers.
  10. Antonczyk, Dirk & Fitzenberger, Bernd & Leuschner, Ute, 2009. "Can a Task-Based Approach Explain the Recent Changes in the German Wage Structure?," ZEW Discussion Papers 08-132, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  11. Edward E Leamer & Michael Storper, 2001. "The Economic Geography of the Internet Age," Journal of International Business Studies, Palgrave Macmillan, vol. 32(4), pages 641-665, December.
  12. Paola Giuri & Salvatore Torrisi & Natalia Zinovyeva, 2008. "ICT, skills, and organizational change: evidence from Italian manufacturing firms," Industrial and Corporate Change, Oxford University Press, vol. 17(1), pages 29-64, February.
  13. Gene M. Grossman & Esteban Rossi-Hansberg, 2006. "Trading Tasks: A Simple Theory of Offshoring," NBER Working Papers 12721, National Bureau of Economic Research, Inc.
  14. Drusilla K. Brown & Alan V. Deardorff & Robert M Stern, 2002. "The Effects of Multinational Production on Wages and Working Conditions in Developing Countries," Working Papers 486, Research Seminar in International Economics, University of Michigan.
  15. David H. Autor & Michael J. Handel, 2013. "Putting Tasks to the Test: Human Capital, Job Tasks, and Wages," Journal of Labor Economics, University of Chicago Press, vol. 31(S1), pages S59 - S96.
  16. Henry Kaiser, 1958. "The varimax criterion for analytic rotation in factor analysis," Psychometrika, Springer, vol. 23(3), pages 187-200, September.
  17. Phillip Swagel & N. Gregory Mankiw, 2005. "The Politics and Economics of Offshore Outsourcing," Working Papers 49881, American Enterprise Institute.
  18. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
  19. Gene M. Grossman & Elhanan Helpman & Adam Szeidl, 2005. "Complementarities between Outsourcing and Foreign Sourcing," American Economic Review, American Economic Association, vol. 95(2), pages 19-24, May.
  20. Stefano Federico, 2012. "Headquarter intensity and the choice between outsourcing versus integration at home or abroad," Industrial and Corporate Change, Oxford University Press, vol. 21(6), pages 1337-1358, December.
  21. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, July.
  22. Rainer Lanz & Sébastien Miroudot & Hildegunn Kyvik Nordås, 2011. "Trade in Tasks," OECD Trade Policy Papers 117, OECD Publishing.
  23. Fernando Merino & Diego Rodr�guez Rodr�guez, 2007. "Business services outsourcing by manufacturing firms," Industrial and Corporate Change, Oxford University Press, vol. 16(6), pages 1147-1173, December.
  24. Lindsay Oldenski, 2012. "The Task Composition of Offshoring by U.S. Multinationals," Economie Internationale, CEPII research center, issue 131, pages 5-21.
  25. Gene M. Grossman & Esteban Rossi-Hansberg, 2006. "The rise of offshoring: it's not wine for cloth anymore," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 59-102.
  26. repec:hrv:faseco:4784029 is not listed on IDEAS
  27. Ethier, Wilfred J, 1986. "The Multinational Firm," The Quarterly Journal of Economics, MIT Press, vol. 101(4), pages 805-33, November.
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