The Spillover Effect of Services Offshoring on Local Labour Markets

Magli, Martina (22. December 2022): The Spillover Effect of Services Offshoring on Local Labour Markets. Collaborative Research Center Transregio 190, Discussion Paper No. 351

Abstract

I provide new empirical evidence on the direct and indirect impact of services offshoring on local employment and wages, using a unique dataset on firms in the UK for the period 2000-2015. Exploiting variation in firms' services offshoring across labour markets, I show positive aggregate local labour employment and wage elasticity to services offshoring. Spillovers from offshoring to non-offshoring firms explain the positive results, and services offshoring complementary to firms' production has a larger effect than the offshoring competing with firms' outputs. Finally, I show that services offshoring widens firms' employment and wage dispersion within local labour markets.

• Item Type: Paper
• Keywords: services offshoring; local labour market; spillover effect; quantile analysis
• Faculties: Economics > Collaborative Research Center Transregio "Rationality and Competition"
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: F1, F16, J2
• Language: English