Offshoring and job stability: Evidence from Italian manufacturing

Abstract

We study the relationship between offshoring and job stability in Italy in the period 1995-2001 by using an administrative dataset on manufacturing workers. We find that the international fragmentation of production negatively affects job stability. Service offshoring and material purchases from developed countries foster job-to-job transitions within manufacturing of all workers and white collars, respectively. However, the most detrimental effects for job stability come from material offshoring to low income countries which drives blue collar workers out of manufacturing. Therefore, policy interventions should especially focus on this latter category of workers more exposed to fragmentation processes and foreign competition. © 2013 Elsevier B.V

Offshoring, job satisfaction and job insecurity

“…Pfaffermayr et al (2007) find that outsourcing increases the labour turnover in Austria. For Italy, Lo Turco et al (2013) conclude that material offshoring to low income countries would hurt especially blue collars by raising their probability to exit the manufacturing sectors. White collars would be more affected by offshoring to high-income countries that would increase the likelihood of switching to another job within the manufacturing sector.…”

“…Numerous empirical studies indicate that in terms of objective job loss risk, high-skilled workers tend to be less affected by offshoring than low-skilled worker Görlich, 2012, 2015). Moreover, the risk of job loss is higher for blue-collar workers (Lo Turco et al, 2013) and workers performing nonroutine and interactive tasks (Baumgarten, 2015). One of the objectives of this paper is to examine whether such discrepancies hold when we switch from objective job loss risks to perceived risks and job satisfaction.…”