Offshoring and relative labor demand from a task perspective

Hogrefe, Jan

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URL:	https://ub-madoc.bib.uni-mannheim.de/34709
URN:	urn:nbn:de:bsz:180-madoc-347094
Document Type:	Working paper
Year of publication:	2013
The title of a journal, publication series:	ZEW Discussion Papers
Volume:	13-067
Place of publication:	Mannheim
Publication language:	English
Institution:	Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series:	Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject:	330 Economics
Classification:	JEL: F16 , F66 , J23,
Keywords (English):	Trade , offshoring , tasks , relative labor demand
Abstract:	This paper provides new evidence on how offshoring shifts relative labor demand for tasks at the industry level. A novel theoretical mechanism, based on sorting of heterogeneous workers into occupations with task dependent offshoring cost, guides estimation. Cost shares of tasks are linked to offshoring in a panel estimation using German data for 1998-2007. It is shown that offshoring shifts home country relative labor demand towards more complex tasks with higher relocation cost. This demand shift holds when controlling for an industry’s skill composition and is particularly strong for offshoring to non-OECD countries.

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