Specialization, outsourcing and wages

Abstract

This paper studies the impact of outsourcing on individual wages. In contrast to the standard approach in the literature, we focus on domestic outsourcing as well as foreign outsourcing. We argue that if outsourcing is associated with specialization gains arising from an increase in the division of labor, domestic outsourcing tends to increase wages for both unskilled and skilled labor. We use a panel data set of workers in Danish manufacturing industries to show that domestic and foreign outsourcing affect wages as predicted.

Do labour market institutions matter? Micro-level wage effects of international outsourcing in three European countries

“…To assess the impact of outsourcing on individual wages we follow the approach in Geishecker and Görg (2008) and Munch and Skaksen (2009) and estimate simple Mincer human capital wage equations of the form Source: Nickell et al (2005) log…”

The effects at home of initiating production abroad: evidence from matched French firms

“…Following Feenstra and Hanson (1999), several works have studied how foreign outsourcing, evaluated through direct or indirect measurements of imported intermediate inputs, affect labour demand (see e.g. Hijzen et al 2005, Ekholm and Hakkala 2005, or Munch and Skaksen 2009. The results are mixed but point in several cases to a significant impact of outsourcing upon labour demand.…”

An Empirical Investigation of Outsourcing Implementation In The Indonesian Manufacturing Industry

“…The analysis was supported by the significant research conducted by McKinsey and Company (2004) as well as Munch and Skaksen (2005). Burhany (2009) found that outsourcing and core competency strategies have affected firm financial performance of the manufacturing companies in Indonesia.…”

“…On the other hand, the lowest value of weighted rating (0.5441) is Row 1 with government regulations on outsourcing (KP). Munch and Skaksen (2005) identify that wage and skill of worker can affect outsourcing decision. Kremic, Tukel and Rom (2006) identify factors that support outsourcing decision are cost of production, business environment, business strategy, and business characteristics.…”

“…Fifth, the problem concerns the labor outsourcing itself. The studies about issues related to outsourcing in other countries were conducted by Anderton and Brenton (1998), Kotabe and Mol (2004), McKinsey & Company (2004), Munch and Skaksen (2005), Kremic, Tukel and Rom (2006) The determinants of outsourcing are widely discussed in numerous analyses. Islam and Sobhani (2008) claim that these factors include: a) reduction in operating costs, b) resource efficiency in terms of business activities of the company, and c) lack of internal resources and an access to e.g.…”