Research Teams |
DT 14/22 - Offshoring and its impact on employmentUsually, in
public discussion and academia there is concern about increased integration in
the world economy and its impact on employment. While there is a number of
studies for developed countries for developing economies these studies are
scarce. The aim of this
work is to analyze the evidence of offshoring on the labor market for an
emerging economy at the firm level. We analyze if there are heterogeneous
effects of offshoring. To this aim, we take into account the level of income of
the countries of origin of foreign inputs, the technological level of the
importing sector, and the export status of offshoring firms. The data source
for this work is an unbalanced panel of manufacturing firms for the period
1998-2008 merged to detailed administrative data from the Customs Direction. We
estimate a dynamic model using a system generalized method of moments which
allows to tackle with rigidities in the labor market as well as the likely
endogeneity of the model. The whole
picture that emerges seems to be that intermediate imports have a small impact
on employment, and when the source is high or middle income countries the
impact is positive mainly for firms in low technology intensive sectors while
exporting firms and firms in high technology sectors are not affected. |