Trade, tasks, and training: The effect of offshoring on individual skill upgrading

Jan Hogrefe () and Jens Wrona ()

No 148, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: We offer a theoretical explanation and empirical evidence for a positive link between increased offshoring and individual skill upgrading. Skill upgrading takes the form of on-thejob training, complementing the existing literature, which mainly focuses on the retraining of workers after a direct job displacement through offshoring. To establish a link between offshoring and on-the-job training, we introduce an individual skill upgrading margin into a variant of the Grossman and Rossi-Hansberg (2008) model of offshoring. By scaling up worker's wages, offshoring in our model creates previously unexploited skill upgrading possibilities and, thus, leads to more on-the-job training. Using data from German manufacturing, we establish a causal link between the growth in industry-level offshoring and an increased on-the-job training propensity at the individual level.

Keywords: Offshoring; Tasks; Skill upgrading; On-the-job training (search for similar items in EconPapers)
JEL-codes: F10 F16 F61 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-lab
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https://www.econstor.eu/bitstream/10419/98161/1/789040492.pdf (application/pdf)

Related works:
Journal Article: Trade, tasks and training: The effect of offshoring on individual skill upgrading (2015)
Working Paper: Trade, tasks, and training: The effect of offshoring on individual skill upgrading (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:148

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