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Services Offshoring and Wages: Evidence from Micro Data

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  • Geishecker, Ingo

    (University of Göttingen)

  • Görg, Holger

    (Kiel Institute for the World Economy)

Abstract

This paper investigates the effects of services offshoring on wages using individual level data combined with industry information on offshoring. Our results show that services offshoring affects the real wage of low and medium skilled individuals negatively. By contrast, skilled workers benefit from services offshoring in terms of higher real wages. Hence, offshoring has contributed to a widening of the wage gap between skilled and less skilled workers. This result is obtained while controlling for individual and sectoral observed and unobserved heterogeneity. In particular, our empirical model also controls for the impact of technological change and offshoring of materials.

Suggested Citation

  • Geishecker, Ingo & Görg, Holger, 2008. "Services Offshoring and Wages: Evidence from Micro Data," IZA Discussion Papers 3593, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3593
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    More about this item

    Keywords

    services offshoring; individual wages;

    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
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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