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The spillover effect of services offshoring on local labour markets

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  • Magli, Martina

Abstract

I provide new empirical evidence on the direct and indirect impact of services offshoring on local employment and wages, using a unique dataset on firms in the UK for the period 2000-2015. Exploiting variation in firms’ services offshoring across labour markets, I show positive aggregate local labour employment and wage elasticity to services offshoring. Spillovers from offshoring to non-offshoring firms explain the positive results, and services offshoring complementary to firms’ production has a larger effect than the offshoring competing with firms’ outputs. Finally, I show that services offshoring widens firms’ employment and wage dispersion within local labour markets.

Suggested Citation

  • Magli, Martina, 2022. "The spillover effect of services offshoring on local labour markets," LSE Research Online Documents on Economics 118048, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:118048
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    File URL: http://eprints.lse.ac.uk/118048/
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    More about this item

    Keywords

    services offshoring; local labour market; spillover effect; quantile analysis;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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