Kiel Working Papers, Kiel Institute for World Economics
No 946:
The Impact of International Outsourcing on the Skill Structure of Employment: Empirical Evidence from German Manufacturing Industries
Markus Diehl
Abstract: In recent publications it has been argued that the change
of the skill structure of industrial employment is caused by biased
technical progress rather than by increasing international trade with low
wage countries. However, in linking prices for final goods with prices of
primary factors, most empirical studies have only dealt with international
trade in final goods and have thereby neglected the impact of international
outsourcing. In this paper it is argued that outsourcing can be understood
as a substitution of imported intermediate inputs for domestic value added,
and that such substitution may have an impact on the skill structure of
domestic employment in favor of skilled labor. The empirical evidence for
German manufacturing industries supports this hypothesis.
Keywords: International Outsourcing, Trade, Wages, Employment.; (follow links to similar papers)
JEL-Codes: F10; J31; (follow links to similar papers)
64 pages, September 1999
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