Working Paper 01-09 - The impact of offshoring on employment in Belgium

Bernhard Klaus Michel

Working Papers from Federal Planning Bureau, Belgium

Abstract: The fear of massive job losses has prompted a fast-growing literature on offshoring and its impact on employment in advanced economies. This paper examines the situation for Belgium. The offshoring intensity is computed as a volume measure of the share of imported intermediate inputs in output based on a series of constant price supply-and-use tables for the period 1995-2003. Both materials and business services offshoring to high-wage and low-wage countries are addressed. The split-up according to the origin of the imported intermediates is done combining detailed trade data with data from the use table. The main findings are that materials offshoring stands at a higher level than business services offshoring, but that the latter grows much faster especially for the Central and Eastern European countries. Estimations of static and dynamic industry-level labour demand equations augmented by offshoring intensities do not reveal a significant impact of either materials or business services offshoring on total employment for Belgium between 1995 and 2003. However, this does not preclude a differential impact by skill-level.

Keywords: Offshoring; Imported intermediate inputs; Supply and use tables; Labour demand equations; Industry-level employment (search for similar items in EconPapers)
JEL-codes: F J (search for similar items in EconPapers)
Date: 2009-01-23
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