Publication

This paper uses German industry-level data from 1995 to 2007 to estimate the effects of offshoring on labor market inequalities between skill groups. It finds that: 1) offshoring is, on average, biased in favor of highly-skilled employees, 2) the labor market adjusts to offshoring mainly through changes in relative wages rather than changes in relative employment, 3) in the service sector, it is medium-skilled employees who are particularly exposed to offshoring, and 4) medium-skilled employees are also negatively affected by technological change.