The Impact of International Outsourcing on Labour Market Dynamics in Germany

29 Pages Posted: 21 Aug 2008

See all articles by Ronald Bachmann

Ronald Bachmann

Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Sebastian Braun

Kiel Institute for the World Economy - IFW

Date Written: July 1, 2008

Abstract

Using an administrative data set containing daily information on individual workers' employment histories, we investigate how workers' labour market transitions are affected by international outsourcing. In order to do so, we estimate hazard rate models for match separations, as well as for worker flows from employment to another job, to unemployment, and to nonparticipation. Outsourcing is found to have no significant impact on overall job stability in the manufacturing sector, but it is associated with increased job stability in the service sector. Furthermore, the effect of outsourcing varies strongly across skill levels and age groups. This is especially the case in the manufacturing sector, where the hazard of transiting to nonemployment rises with international outsourcing for medium-skilled and older workers.

Keywords: Job stability, labour market transitions, worker flows, outsourcing, duration analysis

JEL Classification: F16, J63, J23

Suggested Citation

Bachmann, Ronald and Braun, Sebastian Till, The Impact of International Outsourcing on Labour Market Dynamics in Germany (July 1, 2008). Ruhr Economic Paper No. 53. Available at SSRN: https://ssrn.com/abstract=1240644 or http://dx.doi.org/10.2139/ssrn.1240644

Ronald Bachmann (Contact Author)

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

Sebastian Till Braun

Kiel Institute for the World Economy - IFW ( email )

United States

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