Outsourcing, Occupational Restructuring, and Employee Well-Being: Is There a Silver Lining?

57 Pages Posted: 18 May 2013

See all articles by Petri Bockerman

Petri Bockerman

Labour Institute for Economic Research; University of Turku - Turku School of Economics

Mika Maliranta

ETLA, The Research Institute of the Finnish Economy

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Abstract

This paper examines the relationship between outsourcing and various aspects of employee well-being by devoting special attention to the role of occupational restructuring as a conveying mechanism. Using linked employer-employee data, we find that offshoring involves job destruction, especially when the destination is a low-wage country. In such circumstances, staying employees' job satisfaction is reduced. However, the relationship between outsourcing and employee well-being is not entirely negative. Our evidence also shows that offshoring to high-wage countries stimulates the vertical mobility of employees in affected firms in a manner that improves perceived well-being, particularly in terms of better prospects for promotion.

Keywords: globalization, outsourcing, offshoring, downsizing, working conditions, subjective well-being, job satisfaction

JEL Classification: J28, F23

Suggested Citation

Bockerman, Petri and Maliranta, Mika, Outsourcing, Occupational Restructuring, and Employee Well-Being: Is There a Silver Lining?. IZA Discussion Paper No. 7399, Available at SSRN: https://ssrn.com/abstract=2266826

Petri Bockerman (Contact Author)

Labour Institute for Economic Research ( email )

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+358 9 2535 7332 (Fax)

HOME PAGE: http://www.petribockerman.fi/

University of Turku - Turku School of Economics ( email )

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TURKU, FI-20500
Finland

Mika Maliranta

ETLA, The Research Institute of the Finnish Economy ( email )

Lonnrotink. 4 B
FIN-00120 Helsinki, 00120
Finland
+358 9 609900 (Phone)
+358 9 601753 (Fax)

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