The Spillover Effect of Services Offshoring on Local Labour Markets

Martina Magli
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Martina Magli: LMU Munich

No 351, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

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.

Keywords: services offshoring; local labour market; spillover effect; quantile analysis (search for similar items in EconPapers)
JEL-codes: F1 F16 J2 (search for similar items in EconPapers)
Date: 2022-12-22
New Economics Papers: this item is included in nep-eur, nep-int, nep-lma and nep-ure
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