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International Outsourcing and Individual Job Separations

Author

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  • Jakob Roland Munch

    (Department of Economics, University of Copenhagen)

Abstract

This paper studies the effects of international outsourcing on individual transitions out of jobs in the Danish manufacturing sector for the period 1992-2001. Estimation of a single risk duration model, where no distinction is made between different types of transitions out of the job, shows that outsourcing has a clear significant positive effect on the job separation rate, but the effect corresponds to a limited number of lost jobs. A competing risks duration model that distinguishes between job-to-job and job-to-unemployment transitions is also estimated. Outsourcing is found to increase the unemployment risk of workers and in particular low-skilled workers, but again the quantitative impact is not dramatic. Outsourcing also increases the job change hazard rate and mostly so for high-skilled workers.

Suggested Citation

  • Jakob Roland Munch, 2005. "International Outsourcing and Individual Job Separations," Discussion Papers 05-11, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:0511
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    File URL: http://www.econ.ku.dk/english/research/publications/wp/2005/0511.pdf/
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    Citations

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    Cited by:

    1. Ingo Geishecker & Holger Görg & Jakob Roland Munch, 2007. "Do Labour Market Institutions Matter? Micro-level Wage Effects of International Outsourcing in Three European Countries," Discussion Papers 07/42, University of Nottingham, GEP.
    2. Lo Turco, Alessia & Maggioni, Daniela & Picchio, Matteo, 2013. "Offshoring and job stability: Evidence from Italian manufacturing," Structural Change and Economic Dynamics, Elsevier, vol. 26(C), pages 27-46.
    3. Petri Böckerman & Mika Maliranta, 2013. "Outsourcing, Occupational Restructuring, and Employee Well-Being: Is There a Silver Lining?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(4), pages 878-914, October.
    4. Geishecker, Ingo, 2006. "The impact of international outsourcing on individual employment security: a micro level analysis," Discussion Papers 2006/17, Free University Berlin, School of Business & Economics.
    5. Rosario Crinò, 2009. "Offshoring, Multinationals And Labour Market: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 197-249, April.
    6. Deschryvere, Matthias & Kotiranta, Annu, 2008. "Domestic Employment Effects of Offshoring: Empirical Evidence from Finland," Discussion Papers 1166, The Research Institute of the Finnish Economy.
    7. Pflüger Michael & Blien Uwe & Möller Joachim & Moritz Michael, 2013. "Labor Market Effects of Trade and FDI – Recent Advances and Research Gaps," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(1), pages 86-116, February.
    8. Geishecker, Ingo, 2008. "The impact of international outsourcing on individual employment security: A micro-level analysis," Labour Economics, Elsevier, vol. 15(3), pages 291-314, June.
    9. Sethupathy, Guru, 2013. "Offshoring, wages, and employment: Theory and evidence," European Economic Review, Elsevier, vol. 62(C), pages 73-97.
    10. Ronald Bachmann & Sebastian Braun, 2011. "The Impact Of International Outsourcing On Labour Market Dynamics In Germany," Scottish Journal of Political Economy, Scottish Economic Society, vol. 58(1), pages 1-28, February.
    11. Lurweg, Maren & Uhde, Nicole, 2010. "International trade and individual labour market perspectives: A micro-level analysis of German manufacturing workers," CAWM Discussion Papers 31, University of Münster, Münster Center for Economic Policy (MEP).
    12. repec:hum:wpaper:sfb649dp2008-020 is not listed on IDEAS
    13. repec:zbw:rwirep:0053 is not listed on IDEAS
    14. Wagner, Joachim, 2011. "Productivity and International Firm Activities: What Do We Know?," IZA Policy Papers 23, Institute of Labor Economics (IZA).
    15. Ronald Bachmann & Sebastian Braun, 2008. "The Impact of International Outsourcing on Labour Market Dynamics in Germany," Ruhr Economic Papers 0053, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    16. Lurweg, Maren, 2010. "Perceived job insecurity, unemployment risk and international trade: A micro-level analysis of employees in German service industries," CAWM Discussion Papers 32, University of Münster, Münster Center for Economic Policy (MEP).
    17. Burnett, Perry & Cutler, Harvey, 2018. "The transitional impacts of material and service offshoring," Journal of Policy Modeling, Elsevier, vol. 40(1), pages 136-150.

    More about this item

    Keywords

    international outsourcing; job separations; competing risks duration model;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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