Empirica – Journal of European Economics

Sponsored by the Austrian Economic Association and the Austrian Institute of Economic Research

Empirica publishes empirical and theoretical work on all economic aspects of European Integration. The topics may range from all challenges concerning the deepening of the European Union (Single Market, Lisbon Agenda, EMU) to enlargement and the external relations of the EU (globalisation).

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Joanna Wolszczak-Derlacz, Aleksandra Parteka
The effects of offshoring to low-wage countries on domestic wages: a worldwide industrial analysis
Empirica, 2018, 45(1), S.129-163, http://www.springer.com/10663
This paper extends the literature on the implications of offshoring for labour markets by investigating its effect on the wages of different skill groups in a broad global context. The analysis draws on input-output data from the WIOD project, and in the panel analysed (13 manufacturing industries, 40 countries, 1995-2009) we account for up to 96 percent of the international trade in manufacturing inputs. Being particularly interested in the wage effects of offshoring to low-wage countries (LWC), we use precise LWC classifications (varying across industries and time) to decompose overall offshoring by source country. We use a decomposition of the conventional offshoring measure in order to capture its pure international component, which is further instrumented using a gravity-based strategy. According to the estimation results, the negative impact of offshoring on wages mainly concerns low and medium skilled workers. However, in terms of magnitude, the downward pressure on domestic wages exhibited by offshoring to LWC is relatively small.
Keywords:Wage, Offshoring, Input-output, Low-wage countries
Forschungsbereich:Arbeitsmarktökonomie, Einkommen und soziale Sicherheit
Sprache:Englisch

Managing Editor

Univ.-Prof. MMag. Dr. Harald Oberhofer

Funktion: Ökonom (Senior Economist), Editor-in-Chief Empirica
Forschungsgruppe: Industrie-, Innovations- und internationale Ökonomie