Winners and losers: A Micro-level Analysis of International Outsourcing and Wages

Ingo Geishecker and Holger Görg ()

No 6484, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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 one 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.

Keywords: international outsourcing; offshoring; skills; wages (search for similar items in EconPapers)
JEL-codes: F16 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-hrm, nep-lab and nep-pol
Date: 2007-09
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Journal Article: Winners and losers: a micro-level analysis of international outsourcing and wages (2008)
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