Offshoring in Europe - Evidence of a Two-Way Street from Denmark

34 Pages Posted: 25 Jun 2006

See all articles by Jacob F. Kirkegaard

Jacob F. Kirkegaard

Peter G. Peterson Institute for International Economics

Peter D. Ørberg Jensen

Copenhagen Business School

Nicolai Søndergaard Laugesen

Rambøll Management

Date Written: June 2006

Abstract

Based on a large Danish survey of companies in tradable goods and services sectors, this working paper presents the results of offshoring and its impact on jobs, adding new perspectives to the globalization debate. Globalization entails a cross-border flow of jobs, but contrary to the mainstream media portrayal of globalization, it is not a one-way but a two-way street. In 2002-05 more jobs were created as a result of offshoring of activities into eastern Denmark from companies outside Denmark (i.e., inshored to Denmark) than were eliminated due to offshoring from companies in the Danish region. Overall, the employment effects of both offshoring and inshoring were found to be limited to less than 1 percent of all jobs either lost to offshoring or gained via inshoring. For Denmark, the worries in purely numerical terms regarding the employment effects of globalization seem overly alarmist. However, the trends revealed in the study do pose challenges for low-skilled workers - the group most negatively affected - and for highly skilled specialists, who face pressure to constantly upgrade their skills. Policy implications can be drawn in view of our results to ensure that labor markets are able to meet the demands of globalizing firms.

Keywords: Labor Market, Offshoring, Offshore Outsourcing, High- and Low-Skilled Workers, Skill Bias, Denmark, Flexicurity

JEL Classification: J23, J24, J38, L23

Suggested Citation

Kirkegaard, Jacob F. and Jensen, Peter D. Ørberg and Laugesen, Nicolai Søndergaard, Offshoring in Europe - Evidence of a Two-Way Street from Denmark (June 2006). IIE Working Paper No. 2006-3, Available at SSRN: https://ssrn.com/abstract=902035 or http://dx.doi.org/10.2139/ssrn.902035

Jacob F. Kirkegaard (Contact Author)

Peter G. Peterson Institute for International Economics ( email )

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Washington, DC 20036-1903
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HOME PAGE: http://www.piie.com

Peter D. Ørberg Jensen

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Nicolai Søndergaard Laugesen

Rambøll Management ( email )

Olof Palmes Allé 20
DK-8200 Århus N
Denmark

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