Outsourcing Motives, Location Choice and Labour Market Implications: An Empirical Analysis for European Countries

25 Pages Posted: 12 Apr 2010

See all articles by Marcus Neureiter

Marcus Neureiter

affiliation not provided to SSRN

Peter Nunnenkamp

University of Kiel

Abstract

We use data on motives of international outsourcing and location choices from a recent survey of European companies to assess the labour market repercussions at home. Employing Tobit models we differentiate between job losses as well as job creation for high and low skilled employees at the sector level in ten European home countries. Our findings qualify public concerns about adverse employment effects resulting primarily from cost-oriented sourcing in low wage locations. The quantitative impact on job losses remains modest in the case of cost-saving motives. The simple divide between low and high wage locations hides substantial heterogeneity within both groups. We also find that job losses are typically compensated partly by new job creation, particularly for high skilled workers.

Suggested Citation

Neureiter, Marcus and Nunnenkamp, Peter, Outsourcing Motives, Location Choice and Labour Market Implications: An Empirical Analysis for European Countries. Kyklos, Vol. 63, Issue 2, pp. 206-230, May 2010. Available at SSRN: https://ssrn.com/abstract=1587126 or http://dx.doi.org/10.1111/j.1467-6435.2010.00470.x

Marcus Neureiter (Contact Author)

affiliation not provided to SSRN

No Address Available

Peter Nunnenkamp

University of Kiel ( email )

D-24100 Kiel
Germany

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