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Winners and losers: a micro-level analysis of international outsourcing and wages

Ingo Geishecker and Holger Görg ()

Canadian Journal of Economics, 2008, vol. 41, issue 1, pages 243-270

Abstract: Our paper investigates the link between international outsourcing and wages utilizing a large household panel and combining it with industry-level information on industries' outsourcing activities from input-output tables. This approach avoids problems such as aggregation bias, potential endogeneity bias, and poor skill definitions that commonly hamper industry-level studies. We find that outsourcing has had a marked impact on wages. Applying two alternative skill classifications, we find evidence that a 1 percentage point increase in outsourcing reduced the wage for workers in the lowest skill categories by up to 1.5%, while it increased wages for high-skilled workers by up to 2.6%. This result is robust to a number of different specifications.

JEL-codes: F16 J31 (search for similar items in EconPapers)
Date: 2008
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Handle: RePEc:cje:issued:v:41:y:2008:i:1:p:243-270