Offshoring and the Onshore Composition of Tasks and Skills
Sascha O. Becker
University of Warwick; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Institute for the Study of Labor (IZA); Ifo Institute for Economic Research
Stockholm School of Economics - Department of Economics; Centre for Economic Policy Research (CEPR); Center for Business and Policy Studies (SNS); CESifo (Center for Economic Studies and Ifo Institute)
University of California, San Diego (UCSD) - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)
CEPR Discussion Paper No. DP7391
We analyze the relationship between offshoring and the onshore workforce composition in German multinational enterprises (MNEs), using plant data that allow us to discern tasks, occupations, and workforce skills. Offshoring is associated with a statistically significant shift towards more non-routine and more interactive tasks, and with a shift towards highly educated workers. Moreover, the shift towards highly educated workers is in excess of what is implied by changes in either the task or the occupational composition. Whether offshored activities are located in low-income or high-income countries does not alter the direction of the relationship. We find offshoring to predict between 10 and 15 percent of observed changes in wage-bill shares of highly educated workers and measures of non-routine and interactive tasks.
Number of Pages in PDF File: 47
Keywords: demand for labor, linked employer-employee data, multinational enterprises, trade in tasks
JEL Classification: F14, F16, F23, J23, J24
Date posted: September 8, 2009
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