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: |
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.:
- 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, 2005. "Trade Policy, Income Risk, and Welfare," NBER Working Papers 11255, National Bureau of Economic Research, Inc.
- Tom Krebs & Pravin Krishna & William Maloney, 2004. "Trade Policy, Income Risk, and Welfare," Working Papers 2004-09, Brown University, Department of Economics.
- Constantinides, George M & Duffie, Darrell, 1996.
"Asset Pricing with Heterogeneous Consumers,"
Journal of Political Economy,
University of Chicago Press, vol. 104(2), pages 219-40, April.
- Aiyagari, S Rao, 1994.
"Uninsured Idiosyncratic Risk and Aggregate Saving,"
The Quarterly Journal of Economics,
MIT Press, vol. 109(3), pages 659-84, August.
- David K. Levine & William R. Zame, 2002.
"Does Market Incompleteness Matter?,"
Econometric Society, vol. 70(5), pages 1805-1839, September.
- Meghir, Costas & Pistaferri, Luigi, 2002.
"Income Variance Dynamics and Heterogeneity,"
CEPR Discussion Papers
3632, C.E.P.R. Discussion Papers.
- Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009.
"Revisiting the German Wage Structure,"
The Quarterly Journal of Economics,
MIT Press, vol. 124(2), pages 843-881, May.
- 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.
- 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.
- 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].
- Robert C. Feenstra & Gordon H. Hanson, 1996.
"Globalization, Outsourcing, and Wage Inequality,"
NBER Working Papers
5424, National Bureau of Economic Research, Inc.
- 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.
- 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.
- 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.
- 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.
- Carroll, Christopher D. & Samwick, Andrew A., 1997.
"The nature of precautionary wealth,"
Journal of Monetary Economics,
Elsevier, vol. 40(1), pages 41-71, September.
- 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.
- Mine Zeynep Senses & Pravin Krishna, 2009.
"International Trade and Labor Income Risk in the United States,"
2009 Meeting Papers
471, Society for Economic Dynamics.
- 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.
- 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.
- Tom Krebs, 2003. "Human Capital Risk And Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 118(2), pages 709-744, 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.