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Winners and losers: a micro‐level analysis of international outsourcing and wages

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  • Ingo Geishecker
  • Holger Görg

Abstract

. Our paper investigates the link between international outsourcing and wages utilizing a large household panel and combining it with industry‐level information on industries' outsourcing activities from input‐output tables. This approach avoids problems such as aggregation bias, potential endogeneity bias, and poor skill definitions that commonly hamper industry‐level studies. We find that outsourcing has had a marked impact on wages. Applying two alternative skill classifications, we find evidence that a 1 percentage point increase in outsourcing reduced the wage for workers in the lowest skill categories by up to 1.5%, while it increased wages for high‐skilled workers by up to 2.6%. This result is robust to a number of different specifications. Ce mémoire étudie le lien entre la sous‐traitance internationale et les salaires à l'aide de données d'un grand panel de ménages qu'on combine avec des données au niveau des industries sur les activités de sous‐traitance de celles qui en font obtenues des tableaux interindustriels. Cette approche évite les problèmes qui habituellement polluent les études au niveau de l'industrie (biais d'agrégation, biais d'endogénéité potentielle, mauvaises définitions des habiletés). On découvre que la sous‐traitance a un effet sur les salaires. A l'aide de différentes formes de classification des habiletés, il appert qu'un point de pourcentage d'augmentation dans la sous‐traitance réduit les salaires des travailleurs dans les catégories d'habileté les plus basses de 1.5% alors qu'il accroît les salaires de travailleurs spécialisés de 2.6%. Ce résultat est robuste et avéré même quand on utilise diverses spécifications.

Suggested Citation

  • Ingo Geishecker & Holger Görg, 2008. "Winners and losers: a micro‐level analysis of international outsourcing and wages," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(1), pages 243-270, February.
  • Handle: RePEc:wly:canjec:v:41:y:2008:i:1:p:243-270
    DOI: 10.1111/j.1365-2966.2008.00462.x
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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