Are U.S. White-Collar Really at Risk of Service Offshoring?

This paper deals with recent concerns about potentially negative effects of service offshoring on U.S. white-collar workers. At this purpose, the paper uses highly disaggregated occupational data and develops a Flexible and Separable Translog model in which service offshoring is allowed to affect labor demand for both minor white-collar occupations and major white-collar groups. The model is estimated through Quasi-Maximum Likelihood to account for the presence of corner solutions. Results suggest that concerns about service offshoring are ill-founded: service offshoring stimulates labor demand for the white-collar and changes its skill distribution in favor of high-skilled occupations.Service Offshoring, White-Collar Workers, Labor Demand, Censored Demand System Estimation.

Foreign Ownership and Economic Performance in Italy: Not all is Cherry-Picking!

Confronto dei dati di bilancio di tutte le imprese multinazionali estere con sede amministrativa in Lombardia con i dati di un campione controfattuale di imprese a capitale italian

Liuc papers

Il paper analizza gli effetti dell'offshoring di servizi sui salari dei lavoratori italiani. L'analisi si basa su un nuovo dataset costruito combinando due differenti fonti di informazioni: dati amministrativi rilasciati dall'Istituto Nazionale di Previdenza Sociale (INPS), che permettono di collegare i lavoratori ai rispettivi datori di lavoro (linked employer-employee data), e indicatori settoriali di offhsoring derivati dalle matrici Input-Output pubblicate dall'Istituto Nazionale di Statistica (ISTAT). L'analisi empirica si propone di valutare l'effetto dell'offshoring di servizi sui salari dei lavoratori italiani, controllando opportunamente per le caratteristiche rilevanti dei lavoratori, delle imprese e dei settori di appartenenza. L'analisi mostra che l'offshoring di servizi non ha causato riduzioni significative dei salari. Tuttavia, esso contribuisce ad ampliare la disuguaglianza salariale tra lavoratori maggiormente qualificati e lavoratori meno qualificati. Infine, si riscontrano effetti diversi secondo il tipo di servizi delocalizzati all'estero: l'offshoring di servizi professionali ha infatti effetti moderatamente negativi sui salari dei lavoratori, mentre l'esternalizzazione di altre tipologie di servizi mostra un impatto trascurabile.We study the effects of service offshoring on the wages of Italian workers. To this purpose, we build up a novel data set combining information from two different sources: (1) matched employer-employee data based on administrative records from the Italian National Social Security Institute; and (2) industry-level indicators of service offshoring based on Import Matrices released by the Italian Statistical Office. We estimate worker-level wage regressions controlling for a number of employee, firm and industry characteristics. In line with previous studies, we find that service offshoring does not cause significant reductions in workers' wages. We also find, however, that service offshoring contributes to widening the wage gap between more and less skilled employees. Finally, we document heterogeneity in the effects of service offshoring depending on the type of activities relocated abroad. Specifically, our results show that offshoring of business services exerts moderately negative effects on workers' wages, whereas offshoring of other services has virtually no impact on individual earnings

Imported Inputs and Skill Upgrading

This paper studies the effect of imported inputs on the relative demand for high-skill labor. To this purpose, it applies propensity score matching techniques to firm-level data for 27 transition countries. The results show that importing inputs induces skill upgrading. Specifically, it explains more than one-quarter of the unconditional difference between importers and non-importers in the employment share of high-skill workers. The paper explores possible mechanisms behind this result. In particular, it reports suggestive evidence that importing leads firms to engage in high-skill intensive activities, such as production of new goods, improvement of product quality and, to a lesser extent, R&D and technology adoption

Service Offshoring and Labor Demand in Europe

This chapter aims to shed new light on the labor-market implications of service offshoring by providing novel and extensive empirical evidence on how it affects the demand for labor in Western European countries. It studies two main channels through which service offshoring may affect labor demand. First, service offshoring may induce a parallel shift in the demand schedule. Second, it may change, and possibly increase, its slope (wage elasticity). These two channels may offer complementary explanations for why concerns about service offshoring are mounting in Western Europe. The chapter is organized as follows: Section 3 describes the data set and provides stylized facts on service offshoring and labor demand in Western Europe; section 4 introduces the empirical models; section 5 presents and discusses the results; and finally, section 6 briefly concludes

Service Offshoring and White-Collar Employment

This paper empirically studies the effects of service offshoring on white-collar employment, using data for more than 100 US occupations over the period 1997\u20132006. A model of firm behaviour based on separability allows derivation of the labour demand elasticity with respect to service offshoring for each occupation. Estimation is performed with quasi-maximum likelihood, to account for high degrees of censoring in the employment variable. The estimated elasticities are then related to proxies for the skill level and the degree of tradability of the occupations. Results suggest that service offshoring is skill-biased, because it increases employment in more skilled occupations relative to less skilled occupations. At a given skill level, however, service offshoring penalizes tradable occupations relative to non-tradable occupations