Trade, tasks, and training: The effect of offshoring on individual skill upgrading

Jan Hogrefe () and Jens Wrona ()

No 64, University of Tübingen Working Papers in Business and Economics from University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics

Abstract: We offer a theoretical explanation and empirical evidence for a positive link between increased offshoring and individual skill upgrading. Skill upgrading takes the form of on-the-job training, complementing the existing literature, which mainly focuses on the retraining of workers after a direct job displacement through offshoring. To establish a link between offshoring and on-the-job training, we introduce an individual skill upgrading margin into the small-open-economy version of the Grossman and Rossi-Hansberg (2008) model of offshoring. In our model offshoring, by scaling up workers' wages, creates previously unexploited skill upgrading possibilities and, thus, leads to more on-the-job training. Using data from German manufacturing, we find strong empirical support for the prediction that increased offshoring is positively related to individual on-the-job training participation.

Keywords: Offshoring; Tasks; Skill upgrading; On-the-job training (search for similar items in EconPapers)
JEL-codes: F10 F16 F61 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-eur and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Trade, tasks and training: The effect of offshoring on individual skill upgrading (2015)
Working Paper: Trade, tasks, and training: The effect of offshoring on individual skill upgrading (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuewef:64

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