Working Paper: CEPR ID: DP8628
Authors: Ingo Geishecker; Holger Görg
Abstract: This paper investigates the effects of services offshoring on wages using individual-level data combined with industry information on offshoring for the United Kingdom. Our results show that services offshoring affects the real wage of low- and medium-skilled individuals negatively. By contrast, skilled workers may benefit from services offshoring in terms of higher real wages. Hence, offshoring has contributed to a widening of the wage gap between skilled and less skilled workers. This result is obtained while controlling for individual and sectoral observed and unobserved heterogeneity. In particular, our empirical model also controls for the impact of technological change and offshoring of materials.
Keywords: individual level; services offshoring; wages
JEL Codes: C23; F16; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| services offshoring (L84) | real wage of low and medium-skilled individuals (J31) |
| services offshoring (L84) | real wage of skilled workers (J31) |
| offshoring in industries using the same skills (L89) | wages for low and medium-skilled workers (J31) |
| offshoring in industries using the same skills (L89) | precise wage effect for high-skilled workers (J31) |