Do Labour Market Institutions Matter? Micro-level Wage Effects of International Outsourcing in Three European Countries

This paper studies the impact of outsourcing on individual wages in three European countries with markedly different labour market institutions: Germany, the UK and Denmark. To do so we use individual level data sets for the three countries and construct comparable measures of outsourcing at the industry level, distinguishing outsourcing by broad region. Estimating the same specification on different data show that there are some interesting differences in the effect of outsourcing across countries. We discuss some possible reasons for these differences based on labour market institutions.international outsourcing; individual wages; labour market institutions

The impact of international outsourcing on individual employment security: a micro level analysis

The paper analyzes how international outsourcing affected individual employment security. The analysis is carried out at the micro-level, combining monthly spell data from household panel data and industry-level outsourcing measures. By utilizing micro-level data, problems such as aggregation and potential endogeneity bias, as b well as crude skill approximations that regularly hamper industry level displacement studies, can be reduced considerably. The main finding is that international outsourcing significantly lowers individual employment security. Interestingly, the effect does, however, not differ between high-, medium-, and low-skilled workers but only varies with job duration. --outsourcing,displacement,duration analysis,mass points

Perceived Job Insecurity and Well-Being Revisited: Towards Conceptual Clarity

This paper analyzes the impact of job insecurity perceptions on individual well-being. In contrast to previous studies, we explicitly take into account perceptions about both the likelihood and the potential costs of job loss and demonstrate that most contributions to the literature suffer from simultaneity bias. When accounting for simultaneity, we find the true unbiased effect of perceived job insecurity to be more than twice the size of naive estimates. Accordingly, perceived job insecurity ranks as one of the most important factors in employees' well-being and can be even more harmful than actual job loss with subsequent unemployment.job security, life satisfaction, unemployment

What drives trade-related R&D Spillovers? Decomposing knowlege-diffusing trade flows

Our paper decomposes knowledge-diffusing trade flows and estimates their impacts separately. Overall, trade generates positive knowledge spillovers, but the effects of intra-industry trade are ambiguous. With regard to sectoral import penetration, we find that potential positive spillovers are dominated by negative competition effects. This, however, masks the significant positive spillover effects of intra-industry trade that corresponds to international out-sourcing. --R&D,trade,productivity,spillovers,competition

What Drives Trade-related R&D Spillovers? Decomposing Knowledge- diffusing Trade Flows

Our paper decomposes knowledge-diffusing trade flows and estimates their impacts separately. Overall, trade generates positive knowledge spillovers, but the effects of intra-industry trade are ambiguous. With regard to sectoral import penetration, we find that potential positive spillovers are dominated by negative competition effects. This, however, masks the significant positive spillover effects of intra-industry trade that corresponds to international outsourcing.R&D, trade, productivity, spillovers, competition

Services Offshoring and Wages: Evidence from Micro Data

This paper investigates the effects of services offshoring on wages using individual level data combined with industry information on offshoring. Our results show that services offshoring affects the real wage of low and medium skilled individuals negatively. By contrast, skilled workers benefit from services offshoring in terms of higher real wages. Hence, offshoring has contributed to a widening of the wage gap between skilled and less skilled workers. This result is obtained while controlling for individual and sectoral observed and unobserved heterogeneity. In particular, our empirical model also controls for the impact of technological change and offshoring of materials.services offshoring, individual wages

Services Offshoring and Wages: Evidence from Micro Data

This paper investigates the effects of services offshoring on wages using individual level data combined with industry information on offshoring. Our results show that services offshoring affects the real wage of low and medium skilled individuals negatively. By contrast, skilled workers benefit from services offshoring in terms of higher real wages. Hence, offshoring has contributed to a widening of the wage gap between skilled and less skilled workers. This result is obtained while controlling for individual and sectoral observed and unobserved heterogeneity. In particular, our empirical model also controls for the impact of technological change and offshoring of materials.services offshoring, individual wages

Winners and Losers: Fragmentation, Trade and Wages Revisited

Our paper investigates the link between international outsourcing and wages utilising a large household panel and combining it with industry level information on industries' outsourcing activities from input-output tables. By doing so we can arguably overcome the potential aggregation bias as well as other shortcomings that affect industry level studies. We find that outsourcing has had a marked impact on wages. Distinguishing three skill categories we find evidence that outsourcing reduced the real wage for workers in the lowest skill categories by up to 1.8% while it increased real wages for high-skilled workers by up to 3.3%. This result is robust to a number of different specifications.Outsourcing, Fragmentation, Skills, Wages

a micro-level analysis

The paper analyzes how international outsourcing affected individual employment security. The analysis is carried out at the micro-level, combining monthly spell data from household panel data and industry-level outsourcing measures. By utilizing micro-level data, problems such as aggregation and potential endogeneity bias, as well as crude skill approximations that regularly hamper industry level displacement studies, can be reduced considerably. The main finding is that international outsourcing significantly lowers individual employment security. Interestingly, the effect does, however, not differ between high-, medium-, and low-skilled workers but only varies with job duration