The Wage Effects of Offshoring: Evidence from Danish Matched Worker-Firm Data
AbstractWe employ data that match the population of Danish workers to the universe of private-sector Danish firms, with product-level trade flows by origin- and destination-countries. We document new stylized facts about offshoring and instrument for offshoring and exporting. Within job spells, offshoring increases (decreases) the high-skilled (low-skilled) wage; exporting increases the wages of all skill-types; the net wage-effect of trade varies substantially within the same skill-type; conditional on skill, the wage-effect of offshoring varies across task characteristics. We estimate the overall effects of offshoring on workers' present and future income streams by constructing pre-offshoring-shock worker-cohorts and tracking them over time.
CitationHummels, David, Rasmus Jørgensen, Jakob Munch, and Chong Xiang. 2014. "The Wage Effects of Offshoring: Evidence from Danish Matched Worker-Firm Data." American Economic Review, 104 (6): 1597-1629. DOI: 10.1257/aer.104.6.1597
- F14 Empirical Studies of Trade
- F16 Trade and Labor Market Interactions
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- L24 Contracting Out; Joint Ventures; Technology Licensing