Impact of Trade and Offshore Outsourcing on American Workers
Much controversy surrounds the effects of trade and offshore outsourcing on the wages and employment of American workers. This digest summarizes the most current academic research on this subject.
Autor, Katz, & Kearney (2008)» Feenstra & Hanson (1999)» Slaughter (2003)» Liu & Trefler (2008)»Ebenstein, Harrison, McMillan, & Phillips (2009)»
Data: Linked industry-level U.S. multinational firm data from the Bureau of Economic Analysis with individual-level worker data from the Current Population Survey
Findings:
- Offshore outsourcing to high-wage countries is positively associated with U.S. manufacturing employment (elasticity = +0.08).
- Offshore outsourcing to low-wage countries is correlated with U.S. employment declines (elasticity = -0.02).
- An increase in U.S. multinational employment in high-income locations is correlated with higher wages for workers in the U.S (elasticity = +0.01).
- Globalization depresses wages mainly through workers leaving manufacturing to take jobs in agriculture or services (elasticities = -0.06 and -0.03, respectively).
Autor, David H., Lawrence F. Katz and Melissa S. Kearney, “Trends in U.S. Wage Inequality: Revising the Revisionists”, Review of Economics and Statistics 90 (May 2008), 300-23
Feenstra, Robert and Gordon Hanson
Slaughter, Matt
Liu, and Daniel Trefler
Ebenstein, Avraham, Ann Harrison, Margaret McMillan, and Shannon Phillips, “Estimating the Impact of Trade and Offshoring on American Workers Using the Current Population Surveys,” NBER Working Paper 15107 (June 2009)
