The Labor Market Effects of Offshoring by U.S. Multinational Firms

Brian Kovak, Lindsay Oldenski and Nicholas Sly

No 23947, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use firm-level data on U.S. multinationals to show how offshoring affects domestic employment within and across firms. We introduce a new instrument for offshoring: Bilateral Tax Treaties, which reduce the cost of offshore activities. We find substantial heterogeneity in effects. A 10 percent increase in affiliate employment drives a 1.3 percent increase in employment at the U.S. parent firm, with smaller effects at the industry and regional levels. In contrast, offshoring by vertical multinationals drives declining employment among non-multinationals in the same industry, and firms opening new affiliates exhibit smaller domestic employment growth than those expanding existing affiliates.

JEL-codes: F16 F23 F66 J20 J30 (search for similar items in EconPapers)
Date: 2017-10
New Economics Papers: this item is included in nep-int and nep-lma
Note: ITI LS
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Citations: View citations in EconPapers (20)

Published as Brian K. Kovak & Lindsay Oldenski & Nicholas Sly, 2021. "The Labor Market Effects of Offshoring by U.S. Multinational Firms," The Review of Economics and Statistics, vol 103(2), pages 381-396.

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Journal Article: The Labor Market Effects of Offshoring by U.S. Multinational Firms (2021)
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