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Sectoral adjustment of employment to shifts in outsourcing and trade: evidence from a dynamic fixed effects multinomial logit model

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  • Michael Pfaffermayr

    (Department of Economics, University of Innsbruck, Innsbruck, Austria)

  • Peter Egger

    (University of Munich and CESifo, Munich, Germany)

  • Andrea Weber

    (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria)

Abstract

This paper analyzes the effects of trade and outsourcing on the transition probabilities of employment between sectors, using a dynamic multinomial logit framework with fixed effects. The data cover a sample of individual Austrian male workers over the period 1988-2001. Our results strongly support the view that international economic forces are important determinants of labor market turnover. In particular, an increase in the outsourcing intensity negatively affects the probability of staying in or changing into the manufacturing sector, even more so for industries with a comparative disadvantage. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • Michael Pfaffermayr & Peter Egger & Andrea Weber, 2007. "Sectoral adjustment of employment to shifts in outsourcing and trade: evidence from a dynamic fixed effects multinomial logit model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 559-580.
    • Handle: RePEc:jae:japmet:v:22:y:2007:i:3:p:559-580
    DOI: 10.1002/jae.914
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    References listed on IDEAS

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