The Labor-market Effects of Service Offshoring: A Synthetic Control Approach with High-dimensional Microdata

Otto Kässi

No 97, ETLA Working Papers from The Research Institute of the Finnish Economy

Abstract: Abstract I use novel high-quality survey data on firms’ international sourcing activities combined with firm-level financial and linked employer–employee data to study the effect of services offshoring on wages and employment. To overcome the endogeneity related to reverse causality and omitted variables, I use microsynth, a variation of the synthetic control method specially developed for high-dimensional microdata. I find that offshoring firms pay higher wages for both high-skilled and low-skilled workers, and employ fewer FTE workers compared with a synthetic control, but these effects take several years to appear.

Keywords: Service offshoring; Offshoring (search for similar items in EconPapers)
JEL-codes: C33 F14 J31 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2022-10-28
New Economics Papers: this item is included in nep-bec, nep-int and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:rif:wpaper:97

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