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Skill-Biased Effects of Service Offshoring in Western Europe

Rosario Crino ()

No 205, KITeS Working Papers from KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy

Abstract: This paper studies the e¤ects of service offshoring on the skill composition of labor demand in Western Europe, using comparable data for nine economies during the 1990s. A short-run translog cost function allows derivation of demand elasticities for three labor inputs. Potential endogeneity and measurement error in service offshoring are accounted for by using instruments based on EBRD indexes of telecommunication reform in Eastern Europe. Results show that service offshoring is skill-biased, because it raises relative labor demand for high skilled workers.

Keywords: Service Offshoring; Labor Demand; Instrumental Variable Estimation. (search for similar items in EconPapers)
JEL-codes: F16 J23 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-eec, nep-hrm, nep-int and nep-lab
Date: 2007-10, Revised 2007-10
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