Sectoral adjustment of employment to shifts in outsourcing and trade: evidence from a dynamic fixed effects multinomial logit model
Article first published online: 13 MAR 2007
Copyright © 2007 John Wiley & Sons, Ltd.
Journal of Applied Econometrics
Volume 22, Issue 3, pages 559–580, April/May 2007
How to Cite
Egger, P., Pfaffermayr, M. and Weber, A. (2007), Sectoral adjustment of employment to shifts in outsourcing and trade: evidence from a dynamic fixed effects multinomial logit model. J. Appl. Econ., 22: 559–580. doi: 10.1002/jae.914
- Issue published online: 19 APR 2007
- Article first published online: 13 MAR 2007
- Manuscript Revised: 18 SEP 2005
- Manuscript Received: 23 JUN 2004
- Austrian Science Fund. Grant Number: 17028
This paper analyzes the effects of trade and outsourcing on the transition probabilities of employment between sectors, using a dynamic multinomial logit framework with fixed effects. The data cover a sample of individual Austrian male workers over the period 1988–2001. Our results strongly support the view that international economic forces are important determinants of labor market turnover. In particular, an increase in the outsourcing intensity negatively affects the probability of staying in or changing into the manufacturing sector, even more so for industries with a comparative disadvantage. Copyright © 2007 John Wiley & Sons, Ltd.