The Impact of International Outsourcing on Labour Market Dynamics in Germany

28 Pages Posted: 19 Dec 2010

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

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 has a positive but small impact on overall job stability in the manufacturing sector, and considerably increases job stability in the service sector. However, the effect of outsourcing varies strongly across skill levels and age groups, with negative effects for some workers. 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.

Suggested Citation

Bachmann, Ronald and Braun, Sebastian Till, The Impact of International Outsourcing on Labour Market Dynamics in Germany. Scottish Journal of Political Economy, Vol. 58, No. 1, pp. 1-28, 2010. Available at SSRN: https://ssrn.com/abstract=1727896 or http://dx.doi.org/10.1111/j.1467-9485.2010.00535.x

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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