International Outsourcing And Wages: Winners And Losers

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Source: University of Nottingham

Date: January 2008

Type: White Paper

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Overview: This research paper investigates the link between international 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 one can arguably overcome the potential aggregation bias as well as other shortcomings that affect industry level studies. They find that outsourcing has had a marked impact on wages. Distinguishing three skill categories to find evidence that outsourcing reduced the real wage for workers in the lowest skill categories by up to 1.8% while it increased real wages for high-skilled workers by up to 3.3%.

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