International Outsourcing and the Skill Structure of Labour Demand in the United Kingdom

Alexander Hijzen · Holger Görg · Robert C. Hine

390 citations0/0 files storedThe Economic Journal

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Global trade and economics Labor market dynamics and wage inequality Outsourcing and Supply Chain Management

Abstract

This article investigates empirically the link between international outsourcing and the skill structure of labour demand in the UK. It is the first detailed study of this issue for the UK. Outsourcing is calculated using import‐use matrices of input‐output tables for manufacturing industries for the period 1982 to 1996. Estimating a system of variable factor demands, our main results show that international outsourcing has had a strong negative impact on the demand for unskilled labour. Hence, international outsourcing is an important component in explanations of the changing skill structure of manufacturing industries in the UK.

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References

2001The nature and growth of vertical specialization in world trade 1994Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures 1996Globalization, Outsourcing, and Wage Inequality 1986Errors in variables in panel data 1999The Impact of Outsourcing and High-Technology Capital on Wages: Estimates For the United States, 1979-1990 2001Fragmentation: New Production Patterns in the World Economy 1999Just How Big Is Global Production Sharing?

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