Technology, outsourcing, and the demand for heterogeneous labor: Exploring the industry dimension

Ljubica Nedelkoska () and Simon Wiederhold ()
Additional contact information
Ljubica Nedelkoska: Research Training Group "Economics of Innovative Change" at the Friedrich Schiller University Jena

No 2010-052, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: It has become common within the literature of skill-biased technological change to look at technologies, as well as their impact on the demand for labor as homogeneous across industries. This paper challenges this view. Using a linked employer-employee panel of Germany differentiated by industries for the period 2001-2005, we investigate substitution effects between labor of different skills (tasks) on the one hand, and technology as well as outsourcing on the other. Our findings are at odds with the idea of economy-wide homogeneity of substitution patterns. We find that in some industries IT capital substitutes for labor, while it complements it in others. However, substitution patterns are symmetric across labor types. Outsourcing often correlates negatively with the demand for labor performing explicit and problem-solving tasks. It is mainly uncorrelated or positively correlated with the demand for labor performing interactive tasks. The outsourcing-related results support the offshoring theory proposed by Blinder (2006).

Keywords: demand for skills; technology; outsourcing (search for similar items in EconPapers)
JEL-codes: J23 J24 O33 (search for similar items in EconPapers)
Date: 2010-08-24
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://oweb.b67.uni-jena.de/Papers/jerp2010/wp_2010_052.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2010-052

Access Statistics for this paper

More papers in Jena Economics Research Papers from Friedrich-Schiller-University Jena
Bibliographic data for series maintained by Markus Pasche ().