Offshoring, industry heterogeneity and employment

This paper assesses the employment impact of offshoring in five European countries (Germany, Spain, France, Italy and the United Kingdom), distinguishing between different types of inputs/tasks offshored, different types of offshoring industries and types of professional groups. The empirical evidence shows that offshoring activities are mainly driven by a cost reduction (labour saving) rationale. This is particularly the case for the manufacturing industry where offshoring is found to exert a negative impact among the less qualified or more routinized types of jobs, while the main difference between high- and low-technology industries has to do with the type of labour tasks that are offshored and the types of domestic jobs that are affected. In high-technology industries the negative effects of offshoring on employment are concentrated among managers and crafts. A specular pattern is found in the case of the low-technology industries where job losses are found among manual workers.