Winners and Losers: Fragmentation, Trade and Wages Revisited

Ingo Geishecker () and Holger Görg
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Ingo Geishecker: University of Göttingen

No 982, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Our paper investigates the link between outsourcing and wages utilising a large household panel and combining it with industry level information on industries’ outsourcing activities from input-output tables. By doing so we can arguably overcome the potential endogeneity bias as well as other shortcomings that affect industry level studies. We find that fragmentation has had a marked impact on wages. Distinguishing three skill categories we find evidence that outsourcing reduced the real wage for workers in the lowest skill categories; this result is robust to a number of different specifications and definitions of outsourcing. Furthermore we find some evidence that high-skilled workers experienced increased wages due to fragmentation.

Keywords: wages; fragmentation; trade; outsourcing; skills (search for similar items in EconPapers)
JEL-codes: F16 J31 L24 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2004-01
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Citations: View citations in EconPapers (6)

Published - revised version published as 'Winners and losers: A micro-level analysis of international outsourcing and wages' in: Canadian Journal of Economics / Revue canadienne d'économique, 2008, 41(1), 243-270

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Working Paper: Winners and Losers: Fragmentation, Trade and Wages Revisited (2003)
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