Handelbare Tätigkeiten - Internationalisierungspotenziale und Auswirkung auf den Arbeitsmarkt
Final Report Abstract
During the last decades, internationalization of firms’ activities has increasingly occurred in the form of relocation of single steps in the value chain (“tasks”) to foreign locations, rather than by trading final products. The aim of this project was to investigate the consequences of the po tential for trade in tasks, in particular for the labour market. The project was structured into three Modules: The objective of Module 1 was to derive empirical indicators for the potential of offshoring (i.e., the relocation of tasks and jobs to a foreign country) and outsourcing (i.e. contracting out tasks to an outside supplier). Based on these indicators, the internationalization potentials of occupations and industries were described. Module 2 was concerned with the link between offshorability and offshoring and the degree to which offshoring potential remains unexploited, using different datasets for companies or enterprises. The focus of Module 3 was on the effects of offshorability on the labour market, in par ticular on wage determination and employment. The following main results were obtained: In Module 1, we used data on numerous job and task characteristics of workers in a principal component analysis (PCA) to derive indicators for the outsourcing and offshoring potential. According to our results, jobs with high potentials are found in many manufacturing industries; jobs with lower potentials are often found in white‐collar occupations. Employees in larger firms tend to have lower outsourcing potentials but are more prone to being offshored. Tenure is negatively related to outsourceability whereas the typical job of a college or university graduate is less offshorable than low‐skilled jobs. In Module 2, offshorability was related to offshoring potential, using information on services trade at the Deutsche Bundesbank as well as linked employer‐employee data with information on offshoring and outsourcing activities. Regression results on the determinants of services offshoring broadly confirm findings of existing studies. The level of offshoring is found to be lower in industries or occupations that employ more offshorable tasks domestically. This result indicates that there exists a sizeable potential for offshoring that remains under‐exploited, presumably due to remaining trade barriers. In Module 3, we found that wages are negatively influenced by offshoring and outsourcing potential and that they are significantly lower for individuals with easily offshorable jobs. Preliminary results of a decomposition of changes in the wage structure suggest that the offshorability of tasks plays an important role in wage changes at the bottom of the distribution. Middle‐income workers experienced relative wage increases and low‐wage workers relative declines. This development gives rise to increasing bottom‐end inequality. We also investigated the impact of offshorability on employment changes and worker mobility in Germany. Contrary to what the literature suggests, there is no evidence that net employment creation is higher in non‐offshorable occupations. Furthermore, hiring and job separation rates tend to decline with offshorability. Despite the higher threat of offshoring, offshorable jobs are characterised by a high degree of job stability. Only low‐skilled workers have an increased probability of leaving employment due to offshorability.
Publications
- (2014). Exploiting the Potential for Services Offshoring: Evidence from Ger‐ man Firms. IAW Discussion Paper No. 108
Eppinger, Peter S.
- (2014). Is Offshoring Linked to Offshoring Potentials? Evidence from German Linked‐Employer‐Employee Data. IAW Discussion Paper No. 112
Brändle, Tobias
- (2014). Offshoring and Outsourcing Potentials of Jobs, Evidence from German Micro‐Level Data. IAW Discussion Paper No. 110. (A previous version was published as IAW Discussion Paper No. 93, January 2013)
Brändle, Tobias; Andreas Koch
- (2014). Offshoring Potential and Employment Dynamics. IAW Discussion Paper No. 111. October 2014
Boockmann, Bernhard
- Offshoreability and Wages, Evidence from Ger‐ man Task Data. Journal of Industrial and Business Economics (JIBE)
Brändle, Tobias; Andreas Koch
(See online at https://doi.org/10.1007/s40812-014-0004-z)
