Offshoring, Occupations and Job Tasks: Evidence from Swedish Manufacturing

My purpose in this paper is to analyze how offshoring of intermediate goods affects different occupational groups in Swedish manufacturing firms using data for the period 2001-2008. Advances in ICT, along with improved infrastructure and lower cost of transportation have boosted the contracting and networking of firms in the global markets. A hot trend among firms is to scan the global economy for cost advantages in their domestic production of final goods. Such cost advantages can come in the form of offshoring, where imported inputs either substitute or complement specific job tasks in the domestic production. Occupations are distinguished by job tasks as cognitive (knowledge handling), management (information handling), social (service handling), and motoric (goods handling). The empirical results are in line with the stated hypotheses and show that more high-technology offshoring increases the cost share of employees with cognitive occupations. More low-technology offshoring positively influences the cost share of employees with motoric occupations.