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"Fear" and Offshoring: The Scope and Potential Impact of Imports and Exports of Services

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  • J. Bradford Jensen

    (Peterson Institute for International Economics)

  • Lori G. Kletzer

    (Peterson Institute for International Economics)

Abstract

Commentators, including Princeton University's Alan Blinder, estimate 40 million jobs could be at risk of being offshored over the next 20 years and suggest American workers should specialize in services that can be delivered face-to-face. In contrast, Jensen and Kletzer expect the process of globalization in services will proceed much as it has in manufacturing: They estimate only 15-20 million jobs are at risk of being offshored to low-wage, labor-abundant countries; approximately 40 percent of these jobs will be in the manufacturing sector, long considered "at risk." They expect these losses to be offset by job gains in high-wage activities from services exporting. The United States will retain its comparative advantage in high-skill, high-wage production and increase these activities in tradable service industries as trade barriers diminish. While the loss of low-wage activities that are offshored and the gain from high-wage service exports will cause dislocation, the globalization of services production is likely to have productivity-enhancing effects similar to the impact of globalization in the manufacturing sector, offering significant potential to improve living standards in the United States and around the world.

Suggested Citation

  • J. Bradford Jensen & Lori G. Kletzer, 2008. ""Fear" and Offshoring: The Scope and Potential Impact of Imports and Exports of Services," Policy Briefs PB08-1, Peterson Institute for International Economics.
    • Handle: RePEc:iie:pbrief:pb08-1
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    References listed on IDEAS

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    6. Lori G. Kletzer, 2001. "Job Loss from Imports: Measuring the Costs," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 110, April.
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    2. Andrés Zahler & Leonardo Iacovone & Aaditya Mattoo, 2014. "Trade and Innovation in Services: Evidence from a Developing Economy," The World Economy, Wiley Blackwell, vol. 37(7), pages 953-979, July.
    3. Akay, Alpaslan & Savsin, Selen, 2022. "Offshoring and well-being of workers," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 388-407.
    4. Jooyoun Park, 2018. "The Cleansing Effect of Offshoring in an Analysis of Employment," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 44(2), pages 242-272, April.
    5. Yidan Wang & Raj Nallari & Soamiely Andriamananjara & Breda Griffith & Derek H. C. Chen & Rwitwika Bhattacharya, 2012. "A Primer on Policies for Jobs," World Bank Publications - Books, The World Bank Group, number 2390.
    6. Huffman, Wallace E., 2009. "Investing in people for the 21st century," ISU General Staff Papers 200911020800001149, Iowa State University, Department of Economics.
    7. Elsie L. Echeverri-Carroll, 2013. "Offshore assembly and service industries in Latin America," Chapters, in: Frank Giarratani & Geoffrey J.D. Hewings & Philip McCann (ed.), Handbook of Industry Studies and Economic Geography, chapter 17, pages 411-429, Edward Elgar Publishing.
    8. Kent Eliasson & Pär Hansson, 2016. "Are workers more vulnerable in tradable industries?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 283-320, May.
    9. Galina SAVELIEVA & Svetlana ZAHAROV, 2021. "Challenges Of Labor Market Transformations Towards Social Policies In The Republic Of Moldova," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 6(3), pages 95-120.
    10. Winston W. Chang, 2012. "The Economics Of Offshoring," Global Journal of Economics (GJE), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 1-26.
    11. Lutz Arnold & Stefanie Trepl, 2015. "A North-South Trade Model of Offshoring and Unemployment," Open Economies Review, Springer, vol. 26(5), pages 999-1039, November.
    12. Ziran Li & Qin Bao & Shouyang Wang & Siwei Cheng, 2013. "An Empirical Analysis of the Relationship between Chinese RMB Fluctuation and Overall Unemployment Rates in US," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 16(01), pages 1-18.
    13. Mishra, Saurabh & Lundstrom, Susanna & Anand, Rahul, 2011. "Service export sophistication and economic growth," Policy Research Working Paper Series 5606, The World Bank.
    14. Lundan, Sarianna & Tolvanen, Juha, 2008. "Regional and Global Patterns of Internationalisation of Finnish MNEs," Discussion Papers 1170, The Research Institute of the Finnish Economy.
    15. Ioannis Bournakis & Michela Vecchi & Francesco Venturini, 2011. "Offshoring and Specialisation: Are Industries Moving Abroad?," Quaderni del Dipartimento di Economia, Finanza e Statistica 98/2011, Università di Perugia, Dipartimento Economia.

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