Outsourcing of services has received an enormous amount of attention in the media and political circles in recent times. In just five months, between January and May 2004, there were 2,634 reports in US newspapers on service outsourcing, mostly focusing on the fear of job losses. The main objective of this paper is to investigate and to establish what the hypes are and what the facts about service outsourcing are. It develops a set of stylized facts describing the trends in service outsourcing.
This white paper is published by International Monetary Fund. It has described that outsourcing does not lead to net job losses. Results indicate that, when looking at finely disaggregated sectors, one finds that only a small number of jobs are lost as a result of service outsourcing. Outsourcing does not appear to be leading to net job losses - that is, jobs lost in one industry often are offset by jobs created in other growing industries.