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Globalization, Outsourcing, and Wage Inequality
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This paper found that outsourcing can account for 31-51% of the increase in the relative demand for skilled labor that occurred in US manufacturing industries during the 1980s, compared to their previous estimate of 15-33% by using data from the revised NBER trade database.Abstract:
There is considerable debate over whether international trade has contributed to the declining economic fortunes of less skilled workers One issue that has become lost in the current discussion is how firms respond to import competition and how these responses, in turn, are transmitted to the labor market In previous work, we have argued that outsourcing, by which we mean the import of intermediate inputs by domestic firms, has contributed to an increase in the relative demand for skilled labor in the United States If firms respond to import competition from low-wage countries by moving non- skill-intensive activities abroad, then trade will shift employment towards skilled workers within industries In this paper, we extend our previous work by combining new import data from the revised NBER trade database with disaggregated data on input purchases from the Census of Manufactures We construct industry-by-industry estimates of outsourcing for the period 1972-1990 and reexamine whether outsourcing has contributed to an increase in relative demand for skilled labor Our main finding is that outsourcing can account for 31-51% of the increase in the relative demand for skilled labor that occurred in US manufacturing industries during the 1980s, compared to our previous estimate of 15-33%read more
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References
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Journal ArticleDOI
Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures
TL;DR: This paper investigated the shift in demand away from unskilled and toward skilled labor in U.S. manufacturing over the 1980s and concluded that increased use of nonproduction workers is strongly correlated with investment in computers and in R&D.
Posted Content
Foreign Investment, Outsourcing and Relative Wages
TL;DR: In this article, the authors examine the reduction in the relative employment and wages of unskilled workers in the U.S. during the 1980's and argue that a contributing factor to this decline was rising imports reflecting the outsourcing of production activities.
Are Your Wages Set in Beijing
TL;DR: In the last few decades, the demand for less-skilled workers in the United States and Europe has been falling in the form of increased unemployment for the less skilled and increased imports of manufacturing goods from third-world countries as mentioned in this paper.
Journal ArticleDOI
Are Your Wages Set in Beijing
TL;DR: The economic troubles of less-skilled workers in the United States and OECD-Europe during a period of rising manufacturing imports from third world countries has created a debate about whether, in a global economy, wages or employment are determined by the global rather than domestic labor-market conditions as mentioned in this paper.
MonographDOI
Immigration, Trade, and the Labor Market
John M. Abowd,Richard B. Freeman +1 more
TL;DR: In this article, contributors to Immigration, Trade, and the Labor Market provide an innovative and comprehensive analysis of the labor market impact of the international movements of people, goods, and capital.