Olivier N. Godart (Kiel Institute, RA "The Global Division of Labour")
We contribute to the debate on the labour market effects of offshoring using linked employer - employee data for Germany. This data provides us with precise information on whether a plant contracted out activities abroad, which we define as offshoring at the plant-level. We use the data to provide estimates of the differences in job stability (defined as moving to a new employer, into unemployment or non-participation) for workers related to offshoring at the plant level, controlling for plant and individual characteristics. We also distinguish heterogeneous effects between workers by skill level and relate the effects on job stability to the plant’s industry level exposure to offshoring. Our results suggest that medium skilled workers are the worst affected by offshoring, as their risks of moving into non-participation or unemployment are both higher if they are in a plant that offshores compared to being in a plant that does not. Including industry level offshoring in the analysis shows that all the estimated effects are smaller if plants are in industries that are heavily exposed to offshoring.
Olivier N. Godart (Kiel Institute)