The direct and indirect effect of services offshoring on local labour market outcomesThe study proves evidence of ﬁve new empirical facts on the impact of services oﬀshoring on local labour markets. First, services oﬀshoring increases average employment and wages within local labour markets, much more so in the manufacturing industry than in the services one. Second, positive eﬀects are both on ﬁrms directly oﬀshoring services and on non-oﬀshoring ﬁrms located in the same local labour market of oﬀshoring ones. Third, larger ﬁrms and those paying higher wages beneﬁt the most from local market services oﬀshoring, rising the gap between ﬁrms. Fourth, services oﬀshoring widens the diﬀerences between workers with those in managerial and professional occupations or with a higher level of education beneﬁting the most. Finally, the interpretation of a local labour market is pivotal for the results: local area and sector-local area speciﬁcations reveal positive impacts of services oﬀshoring, opposite to sectoral one.
Covered by The Daily Telegraph (here)