DP5648 The Effect of Offshoring on Labour Demand: Evidence from Sweden

Author(s): Karolina Ekholm, Katariina Hakkala
Publication Date: April 2006
Keyword(s): factor-biased technological change, labour demand, offshoring, translog cost function
JEL(s): F16
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5648

We analyze the effects of offshoring of intermediate input production on labour demand in Sweden, distinguishing between workers with different educational attainments. The econometric results using data for the 1995-2000 period indicate that offshoring -- in particular to low-income countries -- tends to shift labour demand away from workers with an intermediate level of education. Offshoring to high-income countries, which is the largest component of overall offshoring, does not have any statistically significant effect on the composition of labour demand.