Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87702
Authors: 
Hogrefe, Jan
Wrona, Jens
Year of Publication: 
2013
Series/Report no.: 
University of Tübingen Working Papers in Economics and Finance 64
Abstract: 
We offer a theoretical explanation and empirical evidence for a positive link between increased offshoring and individual skill upgrading. Skill upgrading takes the form of on-the-job training, complementing the existing literature, which mainly focuses on the retraining of workers after a direct job displacement through offshoring. To establish a link between offshoring and on-the-job training, we introduce an individual skill upgrading margin into the small-open-economy version of the Grossman and Rossi-Hansberg (2008) model of offshoring. In our model offshoring, by scaling up workers' wages, creates previously unexploited skill upgrading possibilities and, thus, leads to more on-the-job training. Using data from German manufacturing, we find strong empirical support for the prediction that increased offshoring is positively related to individual on-the-job training participation.
Subjects: 
Offshoring
Tasks
Skill upgrading
On-the-job training
JEL: 
F10
F16
F61
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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