The Wage Effects of Offshoring: Evidence from Danish Matched Worker-Firm Data

TY - JOUR

T1 - The Wage Effects of Offshoring

T2 - Evidence from Danish Matched Worker-Firm Data

AU - Hummels, David

AU - Jørgensen, Rasmus

AU - Munch, Jakob R.

AU - Xiang, Chong

N1 - JEL Classification: F14, F16, J24, J31, L24

PY - 2014/6

Y1 - 2014/6

N2 - We employ data that match the population of Danish workers to the universe of private-sector Danish firms, with product-level trade flows by origin- and destination-countries. We document new stylized facts about offshoring and instrument for offshoring and exporting. Within job spells, offshoring increases (decreases) the high-skilled (low-skilled) wage; exporting increases the wages of all skill-types; the net wage-effect of trade varies substantially within the same skill-type; conditional on skill, the wage-effect of offshoring varies across task characteristics. We estimate the overall effects of offshoring on workers' present and future income streams by constructing pre-offshoring-shock worker-cohorts and tracking them over time.

AB - We employ data that match the population of Danish workers to the universe of private-sector Danish firms, with product-level trade flows by origin- and destination-countries. We document new stylized facts about offshoring and instrument for offshoring and exporting. Within job spells, offshoring increases (decreases) the high-skilled (low-skilled) wage; exporting increases the wages of all skill-types; the net wage-effect of trade varies substantially within the same skill-type; conditional on skill, the wage-effect of offshoring varies across task characteristics. We estimate the overall effects of offshoring on workers' present and future income streams by constructing pre-offshoring-shock worker-cohorts and tracking them over time.

U2 - 10.1257/aer.104.6.1597

DO - 10.1257/aer.104.6.1597

M3 - Journal article

SN - 0002-8282

VL - 104

JO - American Economic Review

JF - American Economic Review

IS - 6

ER -