Offshoring and the Geography of Jobs in Great Britain

37 Pages Posted: 29 Sep 2015

See all articles by Luisa Gagliardi

Luisa Gagliardi

University of Geneva - Faculty of Economic and Social Sciences; London School of Economics & Political Science (LSE) - Department of Geography and Environment; Bocconi University - CERTeT - Centre for Research on Regional Economics, Transport and Tourism

Simona Iammarino

London School of Economics & Political Science (LSE) - Department of Geography and Environment

Andrés Rodríguez-Pose

London School of Economics & Political Science (LSE) - Department of Geography and Environment

Date Written: September 2015

Abstract

This paper investigates the impact of the offshoring of production activities on domestic jobs in Great Britain. The paper considers both the spatial heterogeneity across local labour markets and variations in the intensity of outward flows of investments abroad (OFDI) across industries in order to shed new light on the job creation/destruction implications of offshoring. The results suggest that offshoring may generate significant job losses in routine occupations in areas that have been more exposed to the relocation of production abroad, regardless of whether the relocation has been to developed or developing/emerging countries. Offshoring to developing/emerging countries has, by contrast, a positive effect on the generation of non-routine jobs. Efficiency gains accruing from the international reorganization of production increase in the long-run, with compensation mechanisms operating through growth of employment in higher value added activities at home. Overall, our results uncover important spatial and interpersonal inequalities in job creation, which provide new challenges for public policy.

Keywords: job creation and destruction, local labour markets, offshoring, routine and non-routine occupations

JEL Classification: F21, F66, J23, J24, J42

Suggested Citation

Gagliardi, Luisa and Iammarino, Simona and Rodríguez-Pose, Andrés, Offshoring and the Geography of Jobs in Great Britain (September 2015). CEPR Discussion Paper No. DP10855, Available at SSRN: https://ssrn.com/abstract=2666999

Luisa Gagliardi (Contact Author)

University of Geneva - Faculty of Economic and Social Sciences ( email )

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Geneva, CH-1211
Switzerland

London School of Economics & Political Science (LSE) - Department of Geography and Environment ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Bocconi University - CERTeT - Centre for Research on Regional Economics, Transport and Tourism ( email )

Via Roentgen 1
Milan, 20144
Italy

Simona Iammarino

London School of Economics & Political Science (LSE) - Department of Geography and Environment ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Andrés Rodríguez-Pose

London School of Economics & Political Science (LSE) - Department of Geography and Environment ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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