We analyze the relationship between offshoring and the onshore workforce composition in
German multinational enterprises (MNEs), using plant data that allow us to discern tasks,
occupations, and workforce skills. Offshoring is associated with a statistically significant shift
towards more non-routine and more interactive tasks, and with a shift towards highly educated
workers. The shift towards highly educated workers is in excess of what is implied by changes
in either the task or the occupational composition. Offshoring to low-income countries—with
the exception of Central and Eastern European countries—is associated with stronger onshore
responses. We find offshoring to predict between 10 and 15 percent of observed changes
in wage-bill shares of highly educated workers and measures of non-routine and interactive
tasks