Offshoring and labor income risk
This paper analyzes the impact increased offshoring has on labor income risk. It is therefore distinct from a large number of studies explaining the level effects of globalization on the labor market in that it takes a look at effects on second moments, i.e. the variance of incomes. It provides an assessment that directly connects labor income risk and offshoring trends at the sector level. Importantly, we distinguish between transitory and permanent shocks to individual income. Permanent income risk is defined as variance of shocks to income that do not fade out over time and are assumed to be not self-insurable. It thus has a particular relevance for individual welfare. Our findings suggest that offshoring tends to lower permanent income risk. This effect is particularly strong for offshoring to low-income destinations. Hence, there could be potential welfare gains when domestic firms increasingly offshore production to foreign countries.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: L 7,1; D - 68161 Mannheim|
Web page: http://www.zew.de/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Constantinides,George & Duffie,Darrel, 1992.
"Asset pricing with heterogeneous consumers,"
Discussion Paper Serie A
381, University of Bonn, Germany.
- S. Rao Aiyagari, 1993.
"Uninsured idiosyncratic risk and aggregate saving,"
502, Federal Reserve Bank of Minneapolis.
- Becker Sascha O & Muendler Marc-Andreas, 2008. "The Effect of FDI on Job Security," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-46, April.
- Dustmann, Christian & Ludsteck, Johannes & Schönberg, Uta, 2007.
"Revisiting the German Wage Structure,"
IZA Discussion Papers
2685, Institute for the Study of Labor (IZA).
- Tom Krebs & Pravin Krishna & William Maloney, 2005.
"Trade Policy, Income Risk, and Welfare,"
NBER Working Papers
11255, National Bureau of Economic Research, Inc.
- Krebs, tom & Krishna, Pravin & Maloney, William, 2005. "Trade policy, income risk, and welfare," Policy Research Working Paper Series 3622, The World Bank.
- Tom Krebs & Pravin Krishna, 2005. "Trade Policy, Income Risk and Welfare," 2005 Meeting Papers 271, Society for Economic Dynamics.
- Tom Krebs & Pravin Krishna & William Maloney, 2004. "Trade Policy, Income Risk, and Welfare," Working Papers 2004-09, Brown University, Department of Economics.
- Kohler, Wilhelm & Wrona, Jens, 2011.
"Offshoring tasks, yet creating jobs?,"
University of Tuebingen Working Papers in Economics and Finance
12, University of Tuebingen, Faculty of Economics and Social Sciences.
- Costas Meghir & Luigi Pistaferri, 2001.
"Income variance dynamics and heterogenity,"
IFS Working Papers
W01/07, Institute for Fiscal Studies.
- Buch, Claudia M. & Lipponer, Alexander, 2010.
"Volatile multinationals? Evidence from the labor demand of German firms,"
Elsevier, vol. 17(2), pages 345-353, April.
- Buch, Claudia M. & Lipponer, Alexander, 2007. "Volatile multinationals? Evidence from the labor demand of German firms," Discussion Paper Series 1: Economic Studies 2007,22, Deutsche Bundesbank, Research Centre.
- Tom Krebs, 2003. "Human Capital Risk and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 118(2), pages 709-744.
- Pravin Krishna & Mine Zeynep Senses, 2009.
"International Trade and Labor Income Risk in the United States,"
NBER Working Papers
14992, National Bureau of Economic Research, Inc.
- Mine Zeynep Senses & Pravin Krishna, 2009. "International Trade and Labor Income Risk in the United States," 2009 Meeting Papers 471, Society for Economic Dynamics.
- Carroll, Christopher D. & Samwick, Andrew A., 1997.
"The nature of precautionary wealth,"
Journal of Monetary Economics,
Elsevier, vol. 40(1), pages 41-71, September.
- David K. Levine & William Zame, 2001.
"Does Market Incompleteness Matter,"
Levine's Working Paper Archive
78, David K. Levine.
- Geishecker, Ingo & Görg, Holger, 2007.
"Winners and losers: A Micro-level Analysis of International Outsourcing and Wages,"
CEPR Discussion Papers
6484, C.E.P.R. Discussion Papers.
- Ingo Geishecker & Holger Görg, 2008. "Winners and losers: a micro-level analysis of international outsourcing and wages," Canadian Journal of Economics, Canadian Economics Association, vol. 41(1), pages 243-270, February.
- Ann Harrison & Margaret McMillan, 2011.
"Offshoring Jobs? Multinationals and U.S. Manufacturing Employment,"
The Review of Economics and Statistics,
MIT Press, vol. 93(3), pages 857-875, August.
- Ann Harrison & Margaret McMillan, 2009. "Offshoring Jobs? Multinationals and US Manufacturing Employment," Discussion Papers Series, Department of Economics, Tufts University 0741, Department of Economics, Tufts University.
- Feenstra, Robert C & Hanson, Gordon H, 1996.
"Globalization, Outsourcing, and Wage Inequality,"
American Economic Review,
American Economic Association, vol. 86(2), pages 240-45, May.
- Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ Methodenreport 200502_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
- Kjetil Storesletten & Chris I. Telmer & Amir Yaron, 2004. "Cyclical Dynamics in Idiosyncratic Labor Market Risk," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 695-717, June.
- Senses, Mine Zeynep, 2010. "The effects of offshoring on the elasticity of labor demand," Journal of International Economics, Elsevier, vol. 81(1), pages 89-98, May.
When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:12025. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.