The labour market impact of international outsourcing

Over recent years the phenomenon of international outsourcing has provoked a considerable amount of public concern and anxiety. Despite the advocated benefits in terms of efficiency gains, the prevalent view appears to be that international outsourcing severely threatens domestic jobs and wages, in particular for low-skilled workers. However, this view is mainly fuelled by anecdotal evidence since, despite the strong public interest, academic research which analyses the phenomenon of outsourcing empirically is only in its infancy. Also, from a theoretical point of view, the effects of international outsourcing on the labour market outcomes for low-skilled workers seem to be ambiguous.