DP4719 Fear of Outsourcing: Is It Justified?

Author(s): Mary Amiti, Shang-Jin Wei
Publication Date: October 2004
Keyword(s): offshoring, outsourcing, services, trade
JEL(s): F10, F20
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4719

The recent media and political attention on service outsourcing from developed to developing countries gives the impression that outsourcing is exploding. As a result, workers in industrial countries are anxious about job losses. This Paper aims to establish what are the hypes and what are the facts. The results show that although service outsourcing has been steadily increasing it is still very low, and that in the United States and many other industrial countries ?insourcing? is greater than outsourcing. Using the United Kingdom as a case study, we find that job growth at a sectoral level is not negatively related to service outsourcing.