Import, Offshoring and Wages

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Import, Offshoring and Wages

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dc.contributor.author Fosse, Henrik Barslund
dc.contributor.author Maitra, Madhura
dc.date.accessioned 2012-10-08
dc.date.accessioned 2012-10-08T13:40:59Z
dc.date.available 2012-10-08T13:40:59Z
dc.date.issued 2012-10-08
dc.identifier.uri http://hdl.handle.net/10398/8540
dc.description.abstract Offshoring firms are found to pay higher average wages than purely domestic firms. We provide a unifying empirical approach by capturing the different channels through which offshoring may explain this wage difference: (i) due to change in the composition of workers (skill composition effect) (ii) because all existing workers get higher pay (rent sharing effect). Using Danish worker-firm data we explain how much each channel contributes to higher wages. To estimate the causal effect of offshoring on wages we use China’s accession to the WTO in December 2001 - and the soon after boom in Chinese exports - as positive exogenous shocks to the incentive to offshore to China. Both skill composition and rent sharing effects are found to be important in explaining the resultant gain in wages. We also show that the firm’s timing in the offshoring process determines the relative importance of a channel. For firms offshoring to China in 2002 but not in 1999, only rent sharing explains the gain in wages. For firms offshoring to China both before and after China’s WTO accession the wage increase is explained mostly by the skill composition effect. Moreover, these patterns are not discernible from the measures of skill composition and rent sharing available in typical firm level datasets - like ratio of educated to uneducated workers and sales per employee. en_US
dc.format.extent 38 en_US
dc.language eng en_US
dc.publisher Centre for Economic and Business Research. CEBR en_US
dc.subject.other Offshoring en_US
dc.subject.other Wages en_US
dc.subject.other Rent sharing en_US
dc.subject.other China en_US
dc.subject.other WTO en_US
dc.subject.other Worker-firm-panel en_US
dc.title Import, Offshoring and Wages en_US
dc.type wp en_US
dc.accessionstatus modt12okt08 lbjl en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Økonomisk Institut en_US
dc.contributor.departmentshort ECON en_US
dc.contributor.departmentuk Department of Economics en_US
dc.contributor.departmentukshort ECON en_US
dc.publisher.city Frederiksberg en_US
dc.publisher.year 2012 en_US
dc.title.subtitle Rent Sharing or Composition? en_US


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