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Demand for skills in Canada: the role of foreign outsourcing and information‐communication technology

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  • Beiling Yan

Abstract

. One of the defining features of the Canadian Economy in the last two decades has been an increasing wage gap between the more skilled and the less skilled workers. Over the same period, there have been dramatic increases in expenditures on information and communication technologies (ICT) and in purchases of foreign intermediate inputs. This raises an obvious and important question: what is the role of ICT and foreign outsourcing in the increased demand for skilled workers? Using 84 Canadian manufacturing industries over 1981–96, we find that both ICT and foreign outsourcing are important contributors to the demand for skills. JEL classification: F16 O33 Demande de qualifications au Canada: le rôle de la sous‐traitance à l’étranger et des technologies d’information et de communication. L’une des caractéristiques importantes de l’économie canadienne au cours des deux dernières décennies a été l’écart croissant entre les niveaux de salaires des travailleurs plus et moins qualifiés. Au cours de la même période, il y a eu un accroissement important dans les dépenses pour les technologies de l’information et de communication (TIC) et dans les achats d’intrants intermédiaires à l’étranger. Voilà qui pose une question évidente et importante: quel est l’impact des TIC et de la sous‐traitance àl’étranger sur la demande de travailleurs qualifiés? A l’aide de données pour 84 industries manufacturières canadiennes pour la période 1981–1996, on découvre que les TIC et la sous‐traitance à l’étranger contribuent de manière importante à la demande de qualifications.

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  • Beiling Yan, 2006. "Demand for skills in Canada: the role of foreign outsourcing and information‐communication technology," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(1), pages 53-67, February.
    • Handle: RePEc:wly:canjec:v:39:y:2006:i:1:p:53-67
    DOI: 10.1111/j.0008-4085.2006.00338.x
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    1. Masahiro Endoh, 2016. "The Effect of Offshoring on Skill Premiums: Evidence from Japanese Matched Worker-Firm Data," Keio-IES Discussion Paper Series 2016-005, Institute for Economics Studies, Keio University.
    2. Ludo Cuyvers & Emmanuel Dhyne & Reth Soeng, 2010. "The effects of internationalisation on domestic labour demand by skills : Firm-level evidence for Belgium," Working Paper Research 206, National Bank of Belgium.
    3. Rosario Crinò, 2009. "Offshoring, Multinationals And Labour Market: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 197-249, April.
    4. Masahiro Endoh, 2018. "The Effect of Import Competition on Wages in the Japanese Manufacturing Sector," Asian Economic Papers, MIT Press, vol. 17(1), pages 46-67, Winter/Sp.
    5. Beckstead, Desmond Brown, W. Mark Newbold, Bruce, 2008. "Cities and Growth: In Situ Versus Migratory Human Capital Growth," The Canadian Economy in Transition 2008019e, Statistics Canada, Economic Analysis Division.
    6. Ken-ichi Hashimoto, 2015. "Tariffs, Offshoring and Unemployment in A Two-Country Model," The Japanese Economic Review, Japanese Economic Association, vol. 66(3), pages 371-392, September.
    7. Baldwin, John R. Gu, Wulong, 2008. "Outsourcing and Offshoring in Canada," Economic Analysis (EA) Research Paper Series 2008055e, Statistics Canada, Analytical Studies Branch.
    8. Boothby, Daniel & Dufour, Anik & Tang, Jianmin, 2010. "Technology adoption, training and productivity performance," Research Policy, Elsevier, vol. 39(5), pages 650-661, June.
    9. Baldwin, John R. Gu, Wulong, 2008. "Impartition et délocalisation au Canada," Série de documents de recherche sur l'analyse économique (AE) 2008055f, Statistics Canada, Direction des études analytiques.
    10. Rafael Gomez & Morley Gunderson & René Morissette, 2013. "Labour Adjustment Implications of Service Offshoring: Evidence from Canada," British Journal of Industrial Relations, London School of Economics, vol. 51(1), pages 148-173, March.
    11. Jianmin Tang & Henrique Do Livramento, 2010. "Offshoring And Productivity: A Micro‐Data Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(s1), pages 111-134, June.
    12. Endoh, Masahiro, 2021. "Offshoring and working hours adjustments in a within-firm labor market," Journal of the Japanese and International Economies, Elsevier, vol. 60(C).
    13. Lars Calmfors & Giancarlo Corsetti & Michael P. Devereux & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2008. "Chapter 3: The effect of globalisation on Western European jobs: curse or blessing?," EEAG Report on the European Economy, CESifo, vol. 0, pages 71-104, February.
    14. Farole, Thomas & Hollweg, Claire & Winkler, Deborah, 2018. "Trade in Global Value Chain: An Assessment of Labor Market Implication," Jobs Group Papers, Notes, and Guides 30318036, The World Bank.

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    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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