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How Offshoring Can Affect the Industries’ Skill Composition

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  • Daniel Horgos

    (Department of Economics, Helmut Schmidt University, University FAF Hamburg, Holstenhofweg 85, 22043 Hamburg, Germany)

  • Lucia Tajoli

    (Dipartimento di Ingegneria Gestionale, Politecnico di Milano, via Lambruschini 4/b, 20156 Milano, Italy)

Abstract

While most of the offshoring literature focuses on the effects on relative wages, other implications do not receive the necessary attention. This paper investigates the effects on the industries’ skill ratio. It summarizes the empirical literature, discusses theoretical findings, and provides empirical evidence for Germany. As results show, effects are mainly driven by the industry where offshoring takes place. If offshoring takes place in high-skill intensive industries, the high-skill labor ratio increases (vice versa if offshoring takes place in low-skill intensive industries). Results are in line with other empirical findings, however, they seem to contradict theoretical causalities. Thus, we additionally discuss possible explanations.

Suggested Citation

  • Daniel Horgos & Lucia Tajoli, 2015. "How Offshoring Can Affect the Industries’ Skill Composition," Economies, MDPI, vol. 3(2), pages 1-28, May.
    • Handle: RePEc:gam:jecomi:v:3:y:2015:i:2:p:72-99:d:49630
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    References listed on IDEAS

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    More about this item

    Keywords

    offshoring; labor market implications; skill ratio; skill composition;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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