Location of Repository

International outsourcing and labour demand: Evidence from Finnish firm-level data

By Petri Böckerman and Elisa Riihimäki


We examine the employment effects of international outsourcing by using firm-level data from the Finnish manufacturing sector. A major advantage of our data is that outsourcing is defined based on firms’ actual use of intermediate inputs from foreign trade statistics. The estimates show that intensive outsourcing (more than two times the 2-digit industry median) does not reduce employment nor have an effect on the share of low-skilled workers.International outsourcing; offshoring; labour demand; propensity score matching

OAI identifier:

Suggested articles



  1. (2006). A New International Division of L abor in Europe: Outsourcing and Offshoring to Eastern Europe.
  2. (2006). Does Outsourcing to Central and Eastern Europe Really Threaten Manual Workers’ Jobs in Germany? The World Economy
  3. (2008). Domestic R&D Employment Effects of Offshoring R&D Tasks: Some Empirical Evidence from Finland. The Research Institute of the Finnish Economy, Discussion Paper No.
  4. (2009). Equilibrium Unemployment with Outsourcing Under Labour Market Imperfections. Labour Economics,
  5. (2000). European Integration, Liberalisation and Labour Market Performance. In
  6. (1999). European Labour Markets and the Euro: How much Flexibility Do We Really Need?
  7. (2000). Factor mobility and fiscal p olicy in the EU: Policy issues and analytical approaches.
  8. (2004). From the Invisible Handshake to the Invisible Hand? How Import Competition Changes the Employment Relationship.
  9. (2008). International Outsourcing and Job Loss Fears: An Econometric Analysis of Individual Perceptions.
  10. (2005). Labour Demand Effects of International Outsourcing -Evidence from Firm-level Data.
  11. (2006). Offshoring: The Next Industrial Revolution.
  12. (2003). Outsourcing and Skill-specific Employment in a Small Economy: Austria after the Fall of the Iron Curtain.
  13. (2002). Outsourcing, Imports and Labour Demand.
  14. (2008). Outsourcing, Unions, Wages, and Employment: Evidence from Data Matching Imports, Firms, and Workers.
  15. (1998). Product Market Integration and Wages: Evidence from a Cross-section of Manufacturing E stablishments in the United Kingdom.
  16. (2006). PSMATCH2: Stata Module to Perform Full Mahalanobis and Propensity Score Matching, Common Support Graphing, a nd Covariate Imbalance Testing. Software,
  17. (2000). Regulation and Labour Market Performance.
  18. (2003). Sectoral Adjustment of Employment: The Impact of Outsourcing and Trade at the Micro Level.
  19. (2008). Some Practical Guidance for the Implementation of Propensity Score Matching.
  20. (2005). Specialization, O utsourcing and Wages. IZA Discussion Paper No.
  21. (2008). The Effect of FDI on Job Security. The B.E.
  22. (2005). The Effect of Offshoring on Labour Demand: Evidence from Sweden. The Research Institute of Industrial Economics,
  23. (1993). The Effects of Product Market Competition on Collective Bargaining Agreements: The Case of Foreign Competition in Canada.
  24. (1992). The Impact of Import Competition on Employment and Wages in U.S.
  25. (2008). The Impact of International Outsourcing on Individual Employment Security: A Micro-level Analysis.
  26. (1999). The impact of outsourcing and high-technology capital on wages: Estimates for the U.S.,
  27. (2005). The Impact of Outsourcing to China on Hong Kong’s Labor Market.
  28. (2007). Tuotannon ja T&K-toiminnan ulkoistaminen – motiivit ja onnistuminen. (In Finnish).
  29. (2007). Welfare and Employment in a United Europe. Cambridge MA:
  30. (2007). Who Captures Value in a Global Innovation System? The Case of Apple’s iPod.
  31. (2008). Winners and losers: A micro-level analysis of international outsourcing and wages.

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.