Offshoring and the Skill‐premium: Evidence from Individual Workers’ Data

Tempesti, Tommaso

doi:10.1111/twec.12298

Cited by 6 publications

(4 citation statements)

References 43 publications

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“…Some studies examined the positive relationship between a fi rm's offshoring opportunities and wages (Sethupathy, 2013). Tempesti (2016) used workers' data to investigate the effect of offshoring on skill premiums and suggests that it explains the skill premiums of between 9 and 30 percent. Moreover, using new matched data with over one thousand offshoring events in the US, Monarch et al (2017) explored the shortand long-term impacts of offshoring on domestic employment, wages, productivity, and output.…”

Section: Introductionmentioning

confidence: 99%

Offshoring, Wages, and Skill Premiums: Firm‐level Evidence from China

Zhang

Qiu

et al. 2021

China and World Economy

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Using detailed Chinese manufacturing firm production and trade data from 2000 to 2006, this study finds that offshoring significantly increases firms’ average wages. First, using the quasi‐natural experiment of China's accession to the World Trade Organization, we investigate how a reduction in offshoring costs affects the manufacturing firm's wages and find that a productivity effect and a job‐relocation effect are two possible channels. Second, the dynamic decomposition of industry‐level wages indicates that the within‐firm effect is 0.547, accounting for 31.5 percent of the total variation. Finally, a Mincer‐type regression shows that offshoring also increases within‐firm skill premiums. Our findings have strong implications for the government related to framing appropriate industrial policies to raise wages and reduce income inequality.

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Section: Introductionmentioning

confidence: 99%

Offshoring, Wages, and Skill Premiums: Firm‐level Evidence from China

Zhang

Qiu

et al. 2021

China and World Economy

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“…This is a relatively small, but growing literature as older studies in this area have generally relied on industry‐level data. Worker‐level data has been used to investigate the effect of globalisation on wages (Kosteas, ; Ebenstein et al., ), offshoring on the skill premium (Tempesti, ), the sensitivity of wages to the unemployment rate as foreign competition increases (Bertrand ) for US workers in the manufacturing sector and the effect of trade‐induced job displacement on wages in occupations receiving these displaced workers (Kosteas and Park, ). As with the present analysis, each of these studies merges industry‐level trade data with individual‐level data using either NLSY (Kosteas, ; Kosteas and Park, ), CPS data (Bertrand , Ebenstein et al., and Tempesti, ) or the Panel Study of Income and Dynamics (Kosteas and Park, ).…”

Section: Introductionmentioning

confidence: 99%

Workers’ Participation in Training and Import Competition: Evidence from the USA

Kosteas

2016

World Economy

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Merging industry‐level data on imports into the NLSY79 cohort data, we examine the relationship between rising imports and the amount of time workers in the US manufacturing sector spend in training events. A simple theoretical model shows the effect of foreign competition may depend on the type of training. Controlling for both industry and individual fixed effects, we find that rising imports lead workers to spend less time in training for the purpose of career advancement. There is some evidence this effect is stronger for less educated and lower ability workers.

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“…A more closely related paper is Tempesti (2015) O*NET collects data on skill requirements, among others, for more than 800 occupations.…”

Section: Empirical Literaturementioning

confidence: 99%

“…Liu and Trefler (2008) study service offshoring, but only those offshored to India and China. Geishecker and Görg (2013) look at the effect of both material and service offshoring on individual wages for the U.K. Tempesti (2015) looks at the effect on individual wages for the U.S; however, he only looks at material offshoring. Moreover, like Geishecker and Görg (2013), the study uses educational attainment as a proxy for skill.…”

Section: Introductionmentioning

confidence: 99%

Three Essays on Trade and Local Labor Markets

Sharma¹

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Three Essays on Trade and Local Labor Markets Sandeep Sharma This dissertation studies the effect of trade on wage dispersion, crime rates and alcohol consumption at the local labor market level in the the U.S. The first chapter develops a new measure for skill to investigate the effects of offshoring on wages of three types of workers: high-skilled, medium-skilled, and low-skilled. I also look at the effect of offshoring on wages of offshorable occupations. Although the previous literature emphasizes the impact of offshoring on the skill premium, I find that job characteristics such as offshorability is critical in explaining the wage effect. Chapter 2 analyzes the effects of increasing import exposure from the top 6 trading partners of the US (China, Canada, Mexico, Germany, Japan and Korea) on property and violent crimes for the period 1992-2006 at the commuting zone level. My results indicate that a $1000 increase in Chinese exposure increases the property crimes by about 3 percent. On the other hand, the same amount of increase in import exposure from three other developed country trading partners, Germany, Japan and Korea, reduces property crimes between 2 to 4 percent. I find no evidence on the change of violent crimes from any of the countries. The last chapter examines the effects of increasing import competition from China on alcohol consumption at the county level for the years 2002-2006. Recent literature has shown that increasing import competition from China worsens the labor market outcomes. Lower cumulative earnings and the fear of job loss may increase financial stress for workers who may resort to alcohol as a coping mechanism. I find that increasing import exposure from China increases both the prevalence of drinking and binge drinking among workers. The effect is more pronounced for men than women. Further, for men, binge drinking has a larger effect than prevalence of drinking, whereas for women, prevalence of drinking has a larger effect than binge drinking. First and foremost, I wish to express my sincere appreciation to my dissertation advisor and chair, Professor Shuichiro Nishioka. Without Prof. Nishioka's support, encouragement, patience and guidance, this dissertation would not have been possible. I would also like to thank my dissertation committee member, Dr. Brian Cushing, Dr. Stratford Douglas, and Dr. Eugene Bempong Nyantakyi for their constructive suggestions and comments. I am specially thankful to Dr. Douglas for helping me stay on track and recommending me for financial support when I desperately needed one. Additionally, I'd like to thank Dr. Feng Yao for his helpful comments on my dissertation and Dr. Amy Kuhn for her teaching guidance. I am thankful to the economics department for the financial support. I would also like to thank all the professors and my fellow graduate students in the department for all the support. I want to specially thank the "Dedicated" group for their friendship, advice and encouragement. Finally, I'd like to thank my girlfriend Jeniya Maharjan for h...

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Offshoring and the Skill‐premium: Evidence from Individual Workers’ Data

Cited by 6 publications

References 43 publications

Offshoring, Wages, and Skill Premiums: Firm‐level Evidence from China

Offshoring, Wages, and Skill Premiums: Firm‐level Evidence from China

Workers’ Participation in Training and Import Competition: Evidence from the USA

Three Essays on Trade and Local Labor Markets

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