Services Offshoring and Wages: Evidence from Micro Data

17 Pages Posted: 11 Aug 2008

See all articles by Ingo Geishecker

Ingo Geishecker

Georg-August-University Göttingen

Holger Görg

University of Kiel; Kiel Institute for the World Economy

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Abstract

This paper investigates the effects of services offshoring on wages using individual level data combined with industry information on offshoring. Our results show that services offshoring affects the real wage of low and medium skilled individuals negatively. By contrast, skilled workers benefit from services offshoring in terms of higher real wages. Hence, offshoring has contributed to a widening of the wage gap between skilled and less skilled workers. This result is obtained while controlling for individual and sectoral observed and unobserved heterogeneity. In particular, our empirical model also controls for the impact of technological change and offshoring of materials.

Keywords: services offshoring, individual wages

JEL Classification: F16, J31, C23

Suggested Citation

Geishecker, Ingo and Gorg, Holger, Services Offshoring and Wages: Evidence from Micro Data. IZA Discussion Paper No. 3593, Available at SSRN: https://ssrn.com/abstract=1214908 or http://dx.doi.org/10.2139/ssrn.1214908

Ingo Geishecker (Contact Author)

Georg-August-University Göttingen ( email )

Platz der Göttinger Sieben 3
Goettingen, 37073
Germany

Holger Gorg

University of Kiel ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100
Germany

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