Offshoring and the Skill Structure of Labour Demand in Belgium

Bart Hertveldt and Bernhard Michel

No 12-020, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: A major concern regarding the consequences of offshoring is the worsening of the labour market position of low-skilled workers. This paper addresses this issue by providing evidence on the impact of offshoring on the skill structure of manufacturing employment in Belgium between 1995 and 2007. Offshoring is found to significantly lower the employment share of low-skilled workers. Its contribution to the fall in the employment share of low-skilled workers amounts to 35%. This is mainly driven by offshoring to Central and Eastern European countries. Moreover, our analysis contains three extensions with respect to the existing literature. First, while previous papers exclusively focus on materials offshoring, we show that offshoring of business services also contributes significantly to the fall in the low-skilled employment share. Second, according to our results, the widely used current price measures of offshoring underestimate the extent of offshoring and its impact on low-skilled employment. Finally, we find that the impact of offshoring on low-skilled employment is significantly smaller in industries with a higher ICT capital intensity. This result also implies that even if ICT capital facilitates offshoring, especially of business services, this does not lead to faster skill upgrading in industries with a high ICT capital intensity.

Keywords: Materials and business services offshoring; Labour demand; Skill upgrading; Educational attainment; ICT capital intensity (search for similar items in EconPapers)
Pages: 47 p.
Date: 2012-05
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published by:

Downloads: (external link)
https://dipot.ulb.ac.be/dspace/bitstream/2013/118990/3/wp12020.pdf wp12020 (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:sol:wpaper:2013/118990

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... lb.ac.be:2013/118990

Access Statistics for this paper

More papers in Working Papers CEB from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().