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Offshoring and the Age-Skill Composition of Labour Demand

Sotiris Blanas ()

No 209919378, Working Papers from Lancaster University Management School, Economics Department

Abstract: This paper is the first to study the impact of offshoring on the age-skill composition of labour demand. In doing so, it provides novel empirical evidence firmly supporting the argument that the age profile of a worker is at least as crucial a criterion as the skill to be taken into account by firms while they make optimal labour utilisation adjustments through offshoring. The analysis is conducted on a sample of manufacturing and service industries in 12 developed countries for the period 1995-2005. Its main findings are that material and service offshoring to high-income countries decrease the relative demands for older more skilled workers, while they increase the relative demands for the youngest less skilled. In addition, material and service offshoring to low/middle-income countries decrease the relative demands for the youngest workers, while they mostly increase the relative demands for older workers. These findings are explained by the relative abundance of offshoring destinations in skills and in aspects of employment associated with workers' age profiles, such as the level of human capital and expertise, the returns to training and the level of employment protection.

Keywords: offshoring; relaitve labour demand; age-skill profile (search for similar items in EconPapers)
JEL-codes: F14 F16 F66 J21 J23 J24 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age and nep-lma
Date: 2017
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