Introduction

Since the new tradability of services has made services vulnerable to relocation, the public awareness of services offshoring and its potential labor market effects has increased strongly. People's uncertainty and ignorance about the effects of services offshoring on the domestic labor market often encounter pessimistic press articles and contradictory statements by CEOs, politicians, and economists. Therefore, measuring the influence of services offshoring on the German labor market is extremely important. Socially, this study meets the interest of wide parts of the population, whose jobs have become vulnerable to relocation. Scientifically, our study remedies the lack and deficiencies of economic studies on this subject. The first chapter introduces three kinds of labor market effects: productivity, employment, and employment structure. Section 1.1 presents the development of each labor market effect in Germany, which is followed by a literature survey of existing studies that relate this effect to offshoring. Deficiencies of existing research, notably the lack of studies on services offshoring, are pointed out, motivating our own empirical analysis. Section 1.2 outlines the structure, contents, and methodology of this work. Although our focus is put on the specific German case, many insights of our work are also applicable to other developed countries.