Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/173332
Authors: 
Wolszczak-Derlacz, Joanna
Parteka, Aleksandra
Year of Publication: 
2016
Series/Report no.: 
GUT FME Working Paper Series A 6/2016(36)
Abstract: 
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 capture up to 96% of the international trade in manufacturing inputs. Being particularly interested in the wage effects of offshoring to low wage countries (LWC), we employ precise LWC classifications (varying across industries and time) to decompose overall offshoring by source country. We employ 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. LWC (Low wage countries) classifications employed in this paper are downloadable at: http://zie.pg.edu.pl/aparteka/publications [file LowWageCountries_classifications_WolszczakDerlacz_Parteka].
Subjects: 
wage
offshoring
input-output
low-wage countries
JEL: 
F14
F16
F66
C67
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/3.0/deed.pl
Document Type: 
Working Paper

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