This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Review
  4. June 2014
  5. The Wage Effects of Offshoring: Evidence from Danish Matched Worker-Firm Data

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

  • David Hummels
  • Rasmus Jørgensen
  • Jakob Munch
  • Chong Xiang
American Economic Review
vol. 104, no. 6, June 2014
(pp. 1597-1629)
Download Full Text PDF

Abstract

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.

Citation

Hummels, David, Rasmus Jørgensen, Jakob Munch, and Chong Xiang. 2014. "The Wage Effects of Offshoring: Evidence from Danish Matched Worker-Firm Data." American Economic Review, 104 (6): 1597-1629. DOI: 10.1257/aer.104.6.1597

Additional Materials

JEL Classification

  • F14 Empirical Studies of Trade
  • F16 Trade and Labor Market Interactions
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J31 Wage Level and Structure; Wage Differentials
  • L24 Contracting Out; Joint Ventures; Technology Licensing