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.
Forschungsbereich:Arbeitsmarkt, Einkommen und soziale Sicherheit